Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The improvement of palm oil's fundamentals is slow, but there are almost no new potential negative news. Before the Spring Festival, there is a tendency to trade on unfalsifiable topics with the arrival of cold snaps. There is still room for a rise of a couple of hundred points. The bullish sentiment for palm oil in the first quarter is strong, and one can follow the trend in the short - term, while being aware of the risk of a pullback when the price reaches 9200 - 9400 [2][4][6]. - The US is expected to finalize the 2026 biofuel blending quota in early March. The news implies a possible increase in the RVO level, which is positive for US soybean oil. US soybean oil has the potential to reach 56 cents. Domestic soybean oil is currently running stronger along with palm oil and crude oil, with a bullish trading idea for the oil - meal ratio [5][6]. Summary by Relevant Catalogs 1. Last Week's View and Logic - **Palm Oil**: After the MPOB report at the beginning of the month confirmed negative factors and the B50 risk emerged, there were almost no new negative factors in the fundamentals. With the approaching implementation of the US biodiesel policy, frequent speculation topics such as Indonesia and India's tax increases, and the rise in crude oil prices driven by cold snaps and geopolitical issues, Malaysia gradually realized a production cut in January. The seasonal bullish sentiment for palm oil was high, and the palm oil 05 contract rose 3.39% last week [1]. - **Soybean Oil**: There was a lack of South American weather speculation, and the upward driving force for US soybeans was limited. It mainly followed the upward movement of the oil sector. At the same time, the bullish trading idea for the oil - meal ratio was strengthened, and the soybean oil 05 contract rose 1.45% last week [1]. 2. This Week's View and Logic Palm Oil - Although the price increase when there is an import profit for China implies no actual improvement in the fundamentals, there are almost no new potential negative news. Before the Spring Festival, trading on unfalsifiable topics with the arrival of cold snaps is a common strategy. The market has fully priced in Malaysia's high - inventory situation. New trend - setting negative factors would require the production in January - February to remain above 160 and 150 tons respectively. However, with the SPPOMA still showing a 16% production cut in January and the ITS showing an 11% increase in exports in the first 20 days, the inventory in January is expected to return to around 2.8 million tons. So, the market has returned to the normal trading strategy of buying on dips during the production - cut season [2]. - If the month - on - month production cut in January is less than 10%, the annual production in 2026 may increase by 100,000 tons per month on a regular basis, releasing continuous supply pressure. Therefore, when the long - term direction is unclear, short - term operations following the news are recommended [2]. - The biggest variable this year is Indonesia. The Indonesian government claims that B50 may not be promoted this year, with the main goal being to fully implement B40. The early implementation of B50 largely depends on technology and the POGO level. There is an underlying logic for the POGO spread to shrink to $250/ton, but the spread may not return until energy prices fall [2]. - Recently, the price difference between India and Malaysia has rapidly shrunk, the price of fruit bunches in North Sumatra has rebounded, and the refining profit in Indonesia has remained high, indicating an improved willingness to sell in Indonesia, but it is not clear whether the selling pressure is high. The bottom - building rhythm is still dominated by Malaysia. In the sales area, India's CPO import profit has recently recovered, and the international soybean - palm oil price difference has fallen. Before the Argentine soybean oil is available in May, palm oil is still the preferred oil, and Malaysia's exports are expected to remain high [2]. Soybean Oil - Reuters reported that the Trump administration is actively promoting the 2026 biofuel policy, expected to finalize the 2026 biofuel blending quota in early March, considering setting the volume range of D4 biodiesel between 5.2 - 5.6 billion gallons and abandoning the plan to penalize the import of renewable fuels and their raw materials. As the policy implementation deadline approaches, even if the expectation of abandoning the penalty on raw material imports is realized, it will have no negative impact on US soybean oil. The news implies a possible increase in the RVO level, which is positive for US soybean oil, with the expected annual industrial demand for US soybean oil rising from 7 million tons to 8 - 9 million tons. US soybean oil has the potential to reach 56 cents, but one should be aware that the EPA's news may change [5]. - As of this week, the growth of Brazilian soybeans is generally good, and the production outlook is positive. The core production areas in Argentina are relatively dry, and attention should be paid to the later rainfall forecast. The positive outlook for South American soybeans has put strong pressure on the US soybean market. If Argentina does not experience a drought later, the CBOT soybean in January is unlikely to rebound significantly, and it is expected to fluctuate and stabilize. China's customs may accelerate the release of imported soybeans in the first quarter, and the auction of state - reserve imported soybeans is progressing well, weakening the sentiment for the monthly spread. However, there may be a shortage of soybean arrivals in March - April, which may support the domestic soybean spot and monthly spread to fluctuate stronger [5]. 3. Disk Basic Market Data - **Futures Price and Volume**: The palm oil main - continuous contract closed at 8,910 yuan/ton, up 3.39%; the soybean oil main - continuous contract closed at 8,094 yuan/ton, up 1.45%; the rapeseed oil main - continuous contract closed at 8,991 yuan/ton, down 0.52%. The trading volume of palm oil decreased by 575,629 lots, and the open interest increased by 61,137 lots; the trading volume of soybean oil decreased by 247,658 lots, and the open interest increased by 49,094 lots; the trading volume of rapeseed oil decreased by 291,357 lots, and the open interest decreased by 7,746 lots [9]. - **Price Difference**: The rapeseed - soybean 05 spread was 897 yuan/ton, down 14.33%; the soybean - palm 05 spread was - 816 yuan/ton, down 24.01%; the palm oil 5 - 9 spread was 38 yuan/ton, up 216.67%; the soybean oil 5 - 9 spread was 94 yuan/ton, down 27.69%; the rapeseed oil 5 - 9 spread was 28 yuan/ton, down 47.17% [9]. - **Warehouse Receipts**: The number of palm oil warehouse receipts decreased by 488 lots to 660 lots; the number of soybean oil warehouse receipts decreased by 1,434 lots to 26,525 lots; the number of rapeseed oil warehouse receipts decreased by 1,017 lots to 1,125 lots [9].

Report Industry Investment Rating - No relevant information provided. Core Viewpoints - The overall view is that there is no basis for a bull market due to a bumper harvest in South America, but the downside is limited as demand is expected to improve. The market will generally fluctuate with an upward bias, in the range of 1000 - 1200 cents per bushel [5]. - The bearish factors include the possible weakening of the Trump administration's support for the biodiesel blending policy after China purchases US soybeans, Brazil's entry into the harvesting stage, and the continued increase in Brazil's planting area in the 2025/26 season [5]. - The bullish factors are the expected purchase of 12 million tons of US soybeans by China before February 2026 and over 25 million tons per year in the next three years, the initial signs of drought in southern Argentina, and the possibility of a La Nina weather leading to a reduction in South American soybean production [5]. Summary by Directory Market Price - This week, the price of US soybeans closed down in a fluctuating manner. The active contract of US soybeans closed at 1057.75 cents per bushel, down 4.75 cents per bushel. After the USDA released a bearish January supply - demand report, the price briefly fell and then rebounded. The biodiesel blending policy may be announced in March, slightly improving the demand outlook for beans. Next week's key points to watch are China's procurement rhythm, the weather in South American main producing areas, and the progress of the biodiesel policy [7]. - This week, the price of US soybean meal closed at $290 per short ton, down $13.7 per short ton. The January supply - demand report was bearish, putting pressure on beans overall. The biodiesel blending policy is expected to be announced in March, causing the price of soybean oil to strengthen. The oil - meal ratio trading led to a significant decline in the price of meal [10]. - This week, the price of US soybean oil rebounded, closing at 52.61 cents per pound, up 2.92 cents per pound. The biodiesel blending policy is expected in March, supporting the oil and fat market. The strengthening of international crude oil prices has improved the consumption outlook for oil and fat [13]. - As of January 2, the price of soybeans in the US Gulf was $11.19 per bushel, down $0.11 [15]. - As of January 2, the price of soybeans in Iowa was $9.62 per bushel, down $0.28 week - on - week [17]. - On January 16, the spot price in Mato Grosso, Brazil, fell by 0.96 to 103.56 reais per bag [19]. - As of January 16, the spot price at Brazilian ports fell by 3.19 to 131.45 reais per bag [21]. Supply Factors - In Brazil, the southern region will have little precipitation in the next two weeks, the eastern region will have more, and the central - western region will be basically normal. The overall precipitation in the main producing areas of Brazil in the next two weeks will be close to normal. Mato Grosso in Brazil will be basically normal in the next two weeks, while Parana and Rio Grande do Sul will have less precipitation [24][28][31]. - The main producing areas of Argentina will have less precipitation in the next two weeks, and there will be basically no rain in the core producing areas in the next week [38][40]. Demand Factors - As of January 9, the US soybean crushing profit was $2.12 per bushel, compared with $2.33 last week [43]. - In the week ending January 9, the weekly export volume of US soybeans was 1.6373 million tons, compared with 1.1126 million tons last week. The weekly export inspection and quarantine volume was 1.5297 million tons, compared with 0.9841 million tons last week. The net sales volume this year was 2.0619 million tons, compared with 0.8779 million tons last week. The sales volume for the next year was 10,000 tons, compared with 0 tons last week. The quantity shipped to China was 0.9011 million tons, compared with 0.397 million tons last week [45][47][49]. Other Factors - The latest value of the ENSO (NINO3.4 anomaly index) is - 1.106, remaining in the La Nina range [56]. - The cost of soybeans in Brazil is expected to rise next year, and the planting costs of soybeans in Brazil and the US are expected to rise slightly. The planting cost of US soybeans continues to increase, while the cost of Brazilian soybeans has decreased year - on - year [58][60][62]. - As of January 13, the net long position of soybeans in CFTC was 53,000 lots, compared with 95,900 lots last week. The net short position of soybean oil was 49,300 lots, compared with 73,000 lots last week. The net short position of soybean meal was 17,100 lots, compared with 20,700 lots last week [64][66][68].