Shouchuang Futures: The US and Iran reach a ceasefire agreement, domestic oil and fat prices weaken significantly

Today, domestic oilseed futures prices dropped sharply, with palm oil main contracts falling over 4%, and soybean and rapeseed oil main contracts dropping over 3%. The US and Iran reached a two-week ceasefire agreement at the last moment before the escalation of the war, and negotiations will begin in Pakistan on April 10. As a result, international crude oil futures prices for the near month fell over 15%, also dragging down domestic and international oilseed markets. Both US soybean oil and Malaysian palm oil saw about a 4% decline intraday, but the midday Malaysian spot prices declined relatively less, less than 2%. Overall, the easing of the Middle East war situation has had a significant emotional impact on the market, which has digested the short-term sharp decline. However, the subsequent ceasefire, strait navigation, and negotiation issues still carry considerable uncertainty, and it is possible that the situation may fluctuate again later. Additionally, constraints on international energy supply and the risk premium on crude oil prices cannot be fully eliminated in the short term. From the perspective of Southeast Asian major palm oil producing countries, the uncertainty in energy supply has already begun to trigger the promotion of biomass policies and changes in export controls. Therefore, it is still not advisable to turn to a bearish outlook in the long term. In terms of operations, it is recommended to mainly observe in the short term, paying attention to the actual impact of the ceasefire on Gulf energy supply and the pace of US-Iran negotiations. (First Capital Futures)