In September, the trend of soybean oil and the market made a joke. When soybeans in the northern hemisphere faced harvest pressure, soybean oil prices ushered in a catastrophic fall, and the festival effect that the market was waiting for was turned into bubbles. From the morphological point of view, the current trend of soybean oil is extremely bad, but from the perspective of commodity parity and seasonal rules of agricultural products, the market risk has been released and the safety margins have been exhausted. It is expected that the recovery and rebound cycle will gradually enter the stage later.

Domestic supply is abundant but prices have already been reflected. With the transformation of the soybean oil supply surface from the northern hemisphere to the southern hemisphere, the demand side is particularly important, and China, as an important oil-consuming country, has become the focus of domestic supply. According to customs data, in the first eight months of this year, the cumulative value of oil and fat imports was far above the level of the same period of last year. Converting oilseeds into fats, the import volume in the first eight months increased by nearly 30% compared with the same period of last year. The data shows that the cumulative value of imports in the first eight months is equivalent to the cumulative value of 9-10 months before last year, which means that this year's imports of oil and fat have been imported for another 1-2 months from the same period last year. In terms of inventory, currently there are 9 million to 10 million tons of soybeans, 800,000 to 1.2 million tons of soybean oil, and 1.7 million tons of rapeseed oil in the State Reserve (this year is expected to have 1.8 to 2 million tons of temporary storage). In port commercial stocks, soybean stocks are between 5.5 and 6 million tons, palm oil stocks are between 600,000 and 700,000 tons, and soybean oil stocks are between 1 million and 1.2 million tons. If 24 million tons of oil can meet the domestic demand for a year, the current inventory can be used for domestic consumption for more than 3 months, which means that short-term domestic supply is sufficient.

Although the oil market is under pressure from the perspective of supply, the catastrophic decline in prices has already been reflected. From the perspective of the entire commodity market, the prices of basic metals represented by copper returned to the high level in the first half of the year, and the prices of basic industry-related commodities such as rebar and coke were rebounding and were aligned with the 60-day moving average. This shows that the overall market is not pessimistic. At present, the price of oil represented by soybean oil has fallen to a low point during the year. In terms of the price, there is already not much "moisture". Considering the value point of view, it is a relatively safe margin.

The fourth quarter of the consumer season is expected to have a boost. The consumer peak season and holiday effects were diluted in September, but the fourth quarter may be worth looking forward to, especially in October-November. In the fourth quarter, many festivals are concentrated, which is the traditional peak season for oil consumption. The West has Thanksgiving and Christmas. China has New Year's Day and Spring Festival. From the perspective of medium and long-term consumption, China’s consumer demand and import capacity are still relatively strong. On Thursday, according to market expectations, the U.S. Department of Agriculture will increase U.S. soybean production by 5 million to 8 million tons, even if such an increase in supply does not ease the tension on the balance sheet. The earliest South American soybeans entered the market in December. Prior to this, the raw material supply of soybean oil mainly came from the US beans, and the tight supply of US soybeans formed a certain contrast with the peak demand season. The current soybean oil price has a strong upward momentum in the fourth quarter of the expected peak season.

The international soybean market leading the soybean oil market is undergoing the conversion of the north and south markets. Next, the supply side factors such as soybean planting area in the southern hemisphere, and weather rise in the growing season, and the demand side factors that the market will enter the consumption cycle in the fourth quarter of the peak season will support the Soybean oil represents the price of oil.

In general, the negative pressure on the supply and demand sides of the soybean oil market in October and November was relatively small, and the visible negative was being digested or even digested. The factors that can be expected in the later period will support or even push up the price. On a short-term cycle, attention needs to be paid to the production and sales reports for MPOB palm oil and the monthly supply and demand report released by the USDA on Thursday. Since the market is strongly anticipating the bearishness of the report, soybean oil prices are expected to be low before and after the publication of the report, and then gradually shifted to the recovery and rebound cycles.