Shouchuang Futures: Mild Rebound in Two Meal Oils

Today, the domestic market for soybean meal and rapeseed meal continued to rebound moderately, while the oil and fats complex sharply declined. The “oil-meal seesaw” factors provided some support to both the soybean meal and rapeseed meal fronts. On the oilseeds cost side, prices weakened due to the drop in crude oil. Overnight, U.S. soybeans and Canadian canola both fell, but their declines were mainly offset by the fall in oil prices.

On the fundamentals, sentiment in downstream animal breeding remains unfavorable. Market rumors suggest that China has begun to slow down its procurement of soybeans for longer-term shipments, due to uncertainty in future feed demand. Overall, disruptions from international crude oil prices have limited short-term impact on both soybean meal and rapeseed meal. Going forward, the key is to watch whether freight rates will show volatility.

In terms of strategy, it is recommended to close the long “oil-to-meal” spread arbitrage positions, while taking a mainly wait-and-see approach for soybean meal and oil on a directional basis. (Chuangchuang Futures)