BOPO Breakout or Blow-Off? Cracks, Crude, and South American Supply Loom
The BOPO spread (Bean Oil – Palm Oil) has surged from –90 on January 3 to +112.82 today—an extraordinary 200-point reversal that reflects tightness in global vegetable oil markets. Yet under the surface, there are growing signs that this rally may have overreached. In Brazil, FOB Paranaguá premiums for soybean oil have collapsed, now trading at $480 under futures versus a $270 discount earlier this year. This divergence between paper and physical markets suggests that the recent strength in futures is not supported by real demand—and that a correction may be near.
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