Canada Markets

A private firm has estimated Malaysia's Feb. 1-29 exports of palm oil down 18% from the same period during the past month, yet focus remains over a potential seasonal drop in production that may lie ahead. The benchmark Malaysian contract closed 1.6% higher on Thursday for the fourth higher close in five sessions, reaching a four-week high while holding above all major moving averages. The Feb. 29 high was only 0.1% below the recent Jan. 26 high and from reaching its highest trade in three months.

It is interesting to note the Commitment of Traders data for palm oil traded on the Chicago Mercantile Exchange. As of the week ending Oct. 31, noncommercial traders held a record bearish net-short futures position of 12,241 contracts. This bearish position was pared for seven of the next eight weeks, with the speculative trade holding a bullish net-long position for the first seven weeks of 2024. This position was shown as returning to a modest net-short position of 721 contracts for the most recent week ending Feb. 20.

The attached chart shows ProphetX cash market data for four major vegetable oils FOB Rotterdam, reported in United States dollars/metric ton. Over four days of this week, palm oil prices (red line) has lead the competing oils higher, gaining $26.25/mt and may be poised for its largest weekly gain since early January. This compares to a $9.75/mt gain for soybean oil (blue line), a $6.75/mt gain for sunflower oil and a $1.25/mt loss so far for rapeseed.

The soybean oil-palm oil spread (brown line, lower study) has weakened to minus $89.25/mt (palm oil above soybean oil) in today's session, poised for the weakest weekly close or widest spread seen since November 2014. This compares to the 2023 average spread of $125.74/mt, while the three-year average is $192.88/mt.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow him on X, formerly known as Twitter, @CliffJamieson

Cliff Jamieson can be reached at cliff.jamieson@dtn.com.

Follow him on X, formerly known as Twitter, @CliffJamieson.

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