A 3.2% drop in canola prices sent palm oil futures down 3.5%

The 15% drop in global oil prices since the beginning of March and the decline in demand for vegetable oils, which led to a sharp drop in their prices, continues, which continues to put pressure on soybean, canola and palm oil quotes.

Rape quotes on the Paris exchange fell 3.2% yesterday to the lowest level since August 2021 at €453.75/t or $486/t (-22.8% month-to-month, -60% year-to-date) on against the backdrop of reduced demand and increased supply from Canada and Australia on the European market, as well as forecasts of a good rapeseed harvest in the EU in the new season.

May canola futures in Winnipeg yesterday also fell 1.8% to CAD 738.5/t or $540/t (-13% month, -24.5% year).

A 15% drop in Black Sea sunflower oil prices over the month and a fall in EU rapeseed oil prices below palm oil prices are putting pressure on Bursa Malaysia Derivatives listings. There, May palm oil futures have been falling over the past three sessions and yesterday fell 3.56% to a 5-week low of 3,785 ringgit/t or $845/t (-6.5% for the week, +11% for the fortnight ) against the background of the decline of neighboring vegetable oil markets and the strengthening of the ringgit.

The strengthening of the ringgit adds pessimism to Malaysian traders, so they will reduce activity in anticipation of data on palm oil exports for the period 1-20 March.

On the exchange in Dalian, the most active soybean oil contract fell by 0.05%, and palm oil fell by 1.1%.

May soybean oil futures on the Chicago Stock Exchange on Monday rose 0.9% to $1,277/t (-8.6% for the month) on forecasts of a further decline in the soybean harvest in Argentina.

Quotations will bottom out this week and importers will resume purchases, which will stop the decline in prices. Markets will be supported by reduced supply from Argentina, where farmers are holding back sales due to poor harvests and low prices.