The soybean oil commodity index was 52.04 on March 16, up 1.01 points from yesterday, down 48.22% from the cycle's highest point of 100.51 (2011-Septmber-12), and up 4.04% from its lowest point of 50.02 on December 18, 2018(Note: period refers to 2011-Septmber-01 till now). 

The palm oil commodity index was at 60.36 on March 16, up 1.13 points from the previous day, down 46.53% from the cycle high of 112.88 (2012-April-10), and up 17.11% from the low of 51.54 on December 16, 2018 (Note: period from March 1, 2012 to now). 

Since March, the vegetable oil market has basically extended the trend of decline after the Spring Festival, with soybean oil down more than 8 points and palm oil down more than 7 points. On March 16, futures prices rose to boost, and soybean oil as well as palm oil greeted a rebound. Soybean oil market average price is 5320 RMB/ton, a one-day increase of 1.98% while Palm oil market average is 4770 RMB /ton, a one-day rise of 1.92 percent.

The central bank has cut the reserve requirement for soybean oil and palm oil. 

On March 16, the people's bank of China implemented a targeted RRR cut of 0.5 to 1 percentage point for Banks that meet the assessment standards, and an additional RRR cut of 1 percentage point for qualified joint-stock commercial Banks. The central bank has cut the reserve requirement ratio to support the development of the real economy. 

On March 16, soybean oil futures opened high, even the main soybean oil contract opened 5,220 RMB/ton, closed 5,244 RMB/ton, up 48 RMB/ton. Palm oil futures underperformed, opening lower and closing lower, with the main contract at 4,602 RMB/ton, ending down 4 RMB/ton.

Oil companies increase confidence in soybean oil palm oil spot prices higher.

Due to the impact of the crude oil crash, the terminal catering demand is depressed, the price of soybean oil and palm oil continues to fall, the decline of more than 200 RMB/ton, repeatedly hit a record low. The price is at the bottom. However, the soaring soybean oil futures prices increase the confidence of oil companies, which further have increased the spot price of soybean oil and palm oil. 

Soybean oil spot mainstream quoted 5,300-5,400 RMB/ton, a one-day increase of about 100 RMB/ton. Palm oil spot mainstream prices range from 4,700 yuan to 4,900 RMB/ton, with prices up 80 RMB to 100 RMB/ton.

Market Forecasting

The latest round of soybean oil and palm oil price rise is mainly driven by the central bank to cut the reserve requirement ratio news. The end demand is still weak, and the market is still dominated by bearish news. Therefore, this rise is easy to flash in the pan. It is expected that the market soybean oil and palm oil is still difficult to have room to rise or will continue to decline.

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