Chinese edible oil futures rallied to multi-year highs on Wednesday ahead of a U.S. report on global agricultural supply and demand, and on expectations for tight oil supplies.
SHANGHAI, May 12 (Reuters) - Chinese edible oil futures rallied to multi-year highs on Wednesday ahead of a U.S. report on global agricultural supply and demand, and on expectations for tight oil supplies.
Soyoil DBYcv1 on the Dalian Commodity Exchange rallied over 4% to an 8-year top of 9,184 yuan per tonne on Wednesday. Dalian palm oil DCPcv1 also hit its highest in over eight years, advancing nearly 5% to 8,344 yuan per tonne.
Meanwhile, rapeseed oil prices COIcv1 on the Zhengzhou Commodity Exchange rose to a record high of 11,119 yuan per tonne.
The market expects that U.S. and global soybeans end-stocks will continue to decline, so there is an expectation of tight supply and demand, said Haitong Futures edible oils analyst Kong Lingqi, referring to end-stocks data from a U.S. Department of Agriculture report.
If end-stocks are lower or lower than expected, a rising (edible oil) price trend is certain to happen.
Chicago soybeans Sv1 climbed to their highest in nearly nine years on Wednesday, ahead of the USDAs World Agricultural Supply and Demand Estimates report, which will give its first global outlook for 2021/22 and update its 2020/21 estimates. GRA/
Soyoil is a byproduct obtained from soybean crushing for meal.
Analysts also said that a fresh lockdown to curb coronavirus contagion in key palm oil producer Malaysia added to concerns of shrinking global vegetable oil stocks, supporting Chinas edible oil price gains. MYPOMS-TPO
Malaysian benchmark palm oil prices FCPOc3 closed 4% higher on Wednesday after hitting record highs on concerns over tight global edible oil supply. POI/
Coronavirus-induced restrictions last year hampered plantation production and operations, while travel restrictions caused labour shortages in the worlds second largest producer.
Soyoil, palm oil and rapeseed oil are driven by the trend of low global vegetable oil stocks, said Zhao Jinghe, analyst at Beijing Aohan Investment Co.
Edible oil prices will continue being supported, also lead by U.S. soybeans.
Key edible oil markets on the boil again amid fresh supply worries, strong demand recoveryhttps://tmsnrt.rs/3obxgFh
Key global edible oil statisticshttps://tmsnrt.rs/2RN5Jh4
(Reporting by Emily Chow; Editing by Vinay Dwivedi)
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