Report Industry Investment Rating - No relevant content provided Core Viewpoints - The high - yield of palm oil in Malaysia and Indonesia suppresses the palm oil market. The current situation of inventory accumulation due to large supply in the short - term may reverse in the fourth quarter and the first quarter of next year. If Indonesia's high - yield does not persist, the de - stocking time may come earlier. However, if Indonesia maintains high - yield, palm oil will remain weak. It is recommended to view the market with an oscillatory perspective and turn to a bullish mindset if there are signals of production decline [11][12][13] Summary by Directory 1. Weekly Assessment and Strategy Recommendation - **Market Overview**: This week, the three major oils showed weak trends. Palm oil was still underweighted by foreign investors, and long positions in other oils also decreased. High - frequency data from palm oil producing areas were average. From November 1st to 15th, Malaysian palm oil yield increased by 1.82% month - on - month, oil extraction rate increased by 0.43%, and production grew by 4.09%. High - frequency exports from November 1st to 20th decreased by 14.1% - 20.5%. Rapeseed oil stocks continued to decline due to the shutdown of most coastal oil mills, but the supply from Russia and Australia limited its upside. Soybean oil mainly followed the market's oscillations [11] - **International Oils**: Based on normal production levels and international demand in previous years, palm oil will enter a rapid de - stocking phase in the first quarter of next year. However, this year's production in Malaysia and Indonesia is larger than the same period last year, and the first quarter is a low - demand season. If Southeast Asian palm oil production remains high, the expected de - stocking may reverse [11] - **Domestic Oils**: This week, the spot basis of domestic oils was stable. Total domestic oil stocks continued to decline, with sufficient supply. As soybean crushing decreased due to lower arrivals, soybean oil production declined. Rapeseed oil stocks continued to decline due to low imports, and palm oil stocks remained stable due to low imports [11] - **Viewpoint Summary**: The high - yield of palm oil in Malaysia and Indonesia suppresses the palm oil market. The short - term inventory accumulation due to large supply may reverse in the fourth quarter and the first quarter of next year. If Indonesia's high - yield does not persist, the de - stocking time may come earlier. However, if Indonesia maintains high - yield, palm oil will remain weak. It is recommended to view the market with an oscillatory perspective and turn to a bullish mindset if there are signals of production decline [11][12][13] 2. Futures and Spot Market - The report presents the basis and seasonal basis charts of palm oil, soybean oil, and rapeseed oil, including the FOB price of Malaysian palm oil, the 01 contract price, and the spot price of different regions, to show the relationship between futures and spot prices [18][20][22][24] 3. Supply Side - **Production and Exports**: The report shows the monthly production and export volume charts of Malaysian and Indonesian palm oil, the weekly arrival and port inventory of soybeans, and the monthly import volume of rapeseed and rapeseed oil to reflect the supply situation of different oils [27][28][29][31] - **Weather in Palm - producing Areas**: The report presents the weighted precipitation charts of Indonesian and Malaysian palm - producing areas and the NINO 3.4 index chart, which may affect palm oil production [33][34] 4. Profit and Inventory - **Total Inventory**: The report shows the total inventory chart of domestic three major oils and the inventory chart of Indian imported vegetable oils [40] - **Inventory of Different Oils**: It includes the import profit and commercial inventory of palm oil, the spot crushing profit and major oil mill inventory of soybean oil, the coastal spot average crushing profit and commercial inventory of rapeseed oil, and the palm oil inventory in Malaysia and Indonesia [43][45][46][48] 5. Cost Side - **Palm Oil Cost**: The report shows the reference price chart of Malaysian palm fresh fruit bunches and the import cost price chart of Malaysian palm oil [50][52] - **Rapeseed and Rapeseed Oil Cost**: It includes the CNF import price chart of rapeseed oil and the import cost price chart of rapeseed [54] 6. Demand Side - **Oil Transactions**: The report shows the cumulative transaction volume charts of palm oil and soybean oil in the crop year [57] - **Biodiesel Profit**: It presents the POGO spread chart (Malaysian palm oil - Singapore low - sulfur diesel) and the BOHO spread chart (soybean oil - heating oil) to reflect the profit situation of biodiesel [59]

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - The domestic driving force for edible oils is insufficient, and future price movements depend on positive factors from the origin. In the short - term, the market will trade within a range. Pay attention to China - US and China - Canada relations, the de - stocking progress of palm oil origins, and the implementation of the B40 plan. Consider opportunities such as the positive spread trading of rapeseed oil 1 - 5 contracts and buying palm oil 01 contracts on dips [1]. - In the near - term, there is still pressure on domestic edible oils. The supply of soybeans is sufficient, and there is a risk of over - inventory for soybean oil. Rapeseed oil has high inventory, and palm oil supply may increase. The demand for edible oils is mainly for essential needs, but the Mid - Autumn Festival and National Day holidays may boost catering consumption [3][5]. - In the long - term, the edible oil market will focus on the final determination of the US biofuel obligation policy, the supply - demand balance of palm oil origins, the progress of Indonesia's B40 and B50 policies, and China - US and China - Canada relations [8]. 3. Summary by Relevant Catalogs 3.1 Core Contradictions and Strategy Recommendations 3.1.1 Core Contradictions - The US biodiesel policy is uncertain. In the palm oil market, Malaysia entered the production - reduction season in September, while Indonesia's production is normal. The B40 plan in Indonesia may speed up at the end of the year. For soybean oil, Brazil's soybean sowing progress is fast, and global soybean supply is abundant. The purchase of Argentine soybeans can make up for part of the US soybean gap, delaying the tight supply of domestic soybean oil. For rapeseed oil, Canada's new - season output is optimistic, but the supply may still be tight due to the uncertainty of China - Canada relations and limited substitution from Australian rapeseed [1]. 3.1.2 Trading Strategy Recommendations - **Trend Judgment**: Short - term wide - range oscillation. The price ranges are P2601 [9000 - 9900], Y2601 [8000 - 8700], and OI [9600 - 10500]. Consider the opportunity of rebound after over - decline. Technically, consider going long on P2601 at low levels [13]. - **Basis, Calendar Spread, and Hedging Arbitrage Strategies**: For basis strategies, use accumulated option purchases to reduce basis risk. For calendar spread strategies, consider positive spread trading for P1 - 5 at low levels (190, 200). For hedging arbitrage strategies, expect the rapeseed - soybean spread to widen and the soybean - palm spread to narrow [13]. 3.1.3 Industry Client Operation Recommendations - **Price Range Forecast**: The price ranges for soybean oil, rapeseed oil, and palm oil are 8000 - 8400, 9700 - 10300, and 8900 - 9500 respectively [15]. - **Hedging Strategies**: Traders with high inventory can short Y2601 to lock in profits. Refineries with low inventory can buy Y2601 to lock in procurement costs. Oil mills worried about over - inventory can short Y2601 [15]. 3.1.4 Basic Data Overview - Provides the latest prices and price changes of palm oil, soybean oil, and rapeseed oil futures and spot markets, as well as spreads between different contracts and varieties [18][19][20][21]. 3.2 This Week's Important Information and Next Week's Focus Events 3.2.1 This Week's Important Information - **Positive Information**: Malaysia's palm oil exports from September 1 - 30 increased by 7.3% month - on - month. The operating rate of domestic rapeseed oil mills decreased for the second consecutive week. The operating rate of domestic soybean oil mills decreased during the holiday [22][23]. - **Negative Information**: On September 26, the commercial inventory of three major edible oils in China was 240 million tons, still at a high level in recent years. As of last Thursday, Brazil's 2025/26 soybean planting progress reached 3.2% [24]. - **Spot Transaction Information**: Palm oil transactions improved slightly, soybean oil transactions decreased, and rapeseed oil had almost no transactions [25]. 3.2.2 Next Week's Important Events to Follow - September 29 domestic weekly inventory data, high - frequency production and export data of Malaysian palm oil, and progress on the US small - refinery exemption re - allocation decision [30]. 3.3 Disk Interpretation 3.3.1 Price - Volume and Capital Interpretation - **Domestic Market**: This week, the edible oil market oscillated and sorted. Rapeseed oil was relatively strong, while soybean oil and palm oil oscillated. Some speculative funds left the market cautiously. The market is in a multi - empty situation, and the downward space is limited, expected to trade in a range. Pay attention to the rebound opportunity of palm oil after over - decline [31]. - **Capital Trends**: Key profitable positions in palm oil, soybean oil, and rapeseed oil are cautious. Palm oil prices are at a medium - low level historically, with decreasing positions and a weak short - term trend. Soybean oil prices are declining with decreasing positions and increasing negative trend. Rapeseed oil prices are rising, with significant position fluctuations and cautious market sentiment [31]. - **Calendar Spread Structure**: The near - month term structure of edible oils is steeper. The OI1 - 5 positive spread continues to strengthen due to the expected tight supply of rapeseed oil at the end of this year and in the first quarter of next year. P1 - 5 and Y1 - 5 positive spreads are mainly consolidating [33]. - **Basis Structure**: This week, the basis of major edible oil contracts was weak. High domestic inventory and weak demand led to a continued weak basis [51]. - **Spread Structure**: This week, the rapeseed - palm and rapeseed - soybean spreads strengthened. Rapeseed oil supply in the fourth quarter is not optimistic, while the supply pressure of soybean oil and palm oil has eased [55]. - **Foreign Market**: The domestic market followed the foreign market to oscillate and then weaken. Uncertainties in China - US and China - Canada relations and the closure of Argentine exports limited further downward movement. CBOT soybean oil managed funds reduced their net positions, while producers/ traders/ processors/ users increased their positions slightly [57]. 3.4 Valuation and Profit Analysis 3.4.1 Upstream and Downstream Profit Tracking - The POGO spread is slightly lower but still at a high level, and the BOHO spread is at a low level. The overall cost of bio - fuel production remains high due to the low - price competition of Argentine soybean oil [65]. 3.4.2 Import - Export Profit Tracking - China is a net importer of palm oil. The import cost has slightly decreased, and the import profit inversion has narrowed slightly. However, due to weak domestic demand and inventory pressure, the probability of a significant increase in purchasing is low [68]. 3.5 Supply - Demand and Inventory Deduction 3.5.1 Origin Supply - Demand Balance Sheet Deduction - Malaysia's palm oil production is expected to decline in the fourth quarter due to drought in the first quarter and floods in September. The inventory pressure will be further relieved, and the inventory - to - sales ratio is expected to decline [70]. 3.5.2 Supply - Side and Deduction - **Palm Oil**: The procurement intention of traders is low. The monthly purchase volume in September and October is about 200,000 tons. The supply pressure in the fourth quarter is not large, and inventory is expected to decline further. - **Soybean Oil**: The arrival of soybeans in September and October is high, and the supply in the fourth quarter is sufficient. However, the soybean crushing volume may decrease in December, and the supply of soybean oil may be tight if US soybean purchases are difficult [72][73]. - **Rapeseed Oil**: The domestic inventory is high, and demand is weak. High inventory will be gradually reduced in the fourth quarter. If China - Canada relations do not improve, supply may be tight from the end of this year to the first quarter of next year [73]. 3.5.3 Demand - Side and Deduction - In the short term, the inventory pressure of three major edible oils is large, and demand is weak. The Mid - Autumn Festival and National Day holidays may boost catering consumption, but overall terminal demand is still weak compared to last year [75].