The core view is neutral, with all inferences predicated on crude oil maintaining high prices or even rising. The price ratio between palm oil and crude oil is neutral and reasonable, and biodiesel margins have not actively contracted, indicating that palm oil pricing has factored in fundamental weaknesses relative to crude oil. Therefore, palm oil has clear support as long as crude oil prices do not decline. Once factors like geopolitical conflicts drive rapid inventory drawdowns, palm oil may exhibit more independent price movements.

In terms of production regions, Malaysia's March output was weak, aligning with expectations due to Ramadan and holiday impacts. However, prices have not reflected supply tightness, leading to an overall neutral assessment.

Demand is neutral to slightly bullish, supported by incremental demand driven by favorable crude oil trends. India shows strong inventory replenishment expectations, potentially materializing after the Eid al-Fitr celebrations.

Policy factors are neutral to slightly positive, including potential export control expectations for U.S. and Indonesian palm oil, as well as proposals to increase biodiesel blending in Brazil and Southeast Asia.

Regarding palm oil specifics, Malaysia experienced reduced production and inventory drawdowns during Ramadan and holidays as anticipated. March exports from Malaysia and Indonesia showed unusual strength, similar to February, due to substitution effects. With the expected production of around 1.2 million tons and exports of approximately 1.45 million tons, Malaysian inventories may rapidly decline to 2.1 million tons in March, approaching neutral historical levels for the period.

As the palm oil production season begins in April, if production potential remains unrefuted, Malaysia may face continued inventory accumulation from April to June. The recent rapid improvement in Malaysia’s inventory structure is not strongly linked to crude oil, and biodiesel impacts have yet to show clear data. If Indonesia can quickly boost demand and substitute exports, inventory pressures may ease effectively.

Price trends in producing regions, along with spreads and basis movements, indicate that palm oil price increases are primarily driven by rising crude oil prices. Neither local basis trends nor the price differential between Indonesia and Malaysia reflect现货 tightness, with Indonesia showing relative weakness in both domestic CPO spreads and external RBD quotations.

Thus, beyond the neutral palm oil-crude oil ratio in futures, Indonesia’s现货 market has not capitalized on fundamental themes under high crude oil prices recently.

As reflected in现货 conditions, despite Indonesia’s urgent need to address high diesel prices, existing biodiesel profitability, and revised Gakpi data indicating very low inventory levels, no现货 strength or margin recovery has emerged. Feedback suggests Indonesia’s biodiesel blending is policy-constrained due to centralized supply issues, though direct palm oil addition to diesel engines remains unusual. Methanol supply concerns appear manageable, as trade substitution with neighboring countries is feasible in extreme scenarios.

Consequently, palm oil price movements under current crude oil expectations appear unusual. Medium-term factors like Indonesian government interventions to reduce fertilizer use, lower planting inputs, El Niño, and even biodiesel have begun supporting longer-dated contracts. This has led to significant divergence in market views on palm oil time spreads.

For rapeseed and soy-based oils, Canadian rapeseed prices benefit from U.S. soy oil and crude oil influences but, like palm oil, remain least affected by geopolitical conflicts among oils. Despite overall price increases, Canadian rapeseed fundamentals stay weak. With cumulative deliveries down over 600,000 tons and consumption up 230,000 tons, considering new-crop production growth and lagging exports, the global rapeseed oversupply narrative will inevitably transmit domestically.

Short-term strength in nearby rapeseed oil may persist due to non-GMO issues involving Russia and Kazakhstan amid low inventories, but medium-term declines in rapeseed oil spreads and weakening basis are inevitable.

Globally, selling pressure in the rapeseed complex remains. Although Europe faces significant energy challenges, current rapeseed oil prices and biodiesel policies offer no demand growth expectations for international rapeseed oil. Future policies combined with sustained high crude oil prices may instead benefit waste oil prices and demand.

From an international perspective, Australian rapeseed prices remain unaffected this time, with spreads to Canadian rapeseed stable at $40–52, yielding very strong crushing margins domestically. Notably, fertilizers historically accounted for over 40% of Canadian rapeseed planting costs. If rising fertilizer prices impact new-crop planting, far-month rapeseed oil prices may need reassessment.

U.S. soy oil shows excessive policy speculation, leaving diesel as its primary driver. Recent sharp adjustments in D4 RIN theoretical prices—plummeting from $1.45 to $1.01 in two weeks—contrast with market prices easing only from $1.61 to $1.52. This divergence suggests further downside pressure for D4 RINs, potentially bearish for U.S. biodiesel margins and soy oil demand.

U.S. soy oil’s bullish factors appear fully priced, especially policy-related ones. Extreme RIN trading in the U.S. limits additional demand expectations before policy finalization, let alone actual demand realization.

On demand, India’s imports are significantly impacted by conflict, with sunflower oil imports disrupted by logistics. Recent port inventory data show total edible oil stocks dropping nearly 20% by mid-March from late February, with declines of 16%–30% for soy, sunflower, and crude palm oil.

If India’s inventory drawdown stems from high oil prices, Ramadan-related supply issues, or rumored reduced consumption due to natural gas shortages, significant replenishment demand should emerge post-normalization. This could quickly offset expected price pressures from April production increases in origin regions.

Domestically, China awaits inventory structure changes.