Always good to take a look at charts during a holiday in Europe. With US bean harvest over and crush margin inverted by close to 50 c/bushels through Jan, one would expect crushers to continue to expand stocks of Soyoil as they are crushing to meet domestic meal orders prior to Thanksgiving holiday. This crush inversion is reflected in firm basis throughout midwest for physical beans. However, China indices keep fomenting bad news (real estate and Copper values) for soy imports while Soyoil premium FOB paranagua are still stuck in deep negative territory at -1000 and -1250 through Apr/May. BOPO (Bean Oil - Palm Oil) values are still down 24% in last 3 months to $352/mt ... remember they were at $668.69 last Aug 18. Palm oil is not a substitute but do trade together with bean oil in tandem and of course gasoil. A normal spread for BOPO futures is probably 100-150 ... perhaps 200 because of the extra Renewable diesel demand affecting soy oil demand. So we are still at least $150/mt away from normalized BOPO markets. Despite geopolitical tensions, the chart for gasoil and HO is simply not looking good so don't see much support for Vegoil there in Q4 and with inverted crush margin and POGO at only -85/mt, we are probably going to test lower values in vegetable oils. Still think Palm will lead the way to test support at $720/MT
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