Palm and soybean oil prices fell by 3-4% in anticipation of updated global balance sheets

A long weekend in Asia to celebrate the new year reduced trading activity in the palm oil market, while soybean oil prices continued to rise and hit an 11-year high.

Earlier this week, April palm oil futures on the Malaysian stock exchange fell 3% from a record 5,617 ringgit/t or.1,342/t to 5,445 ringgit/t or. 1,302/t on the back of a 25% decline in exports from Malaysia in January compared to December.

Prices for soybeans and soybean oil continued to rise rapidly on the Chicago Stock Exchange last week on forecasts of a reduction in soybean production in Brazil.

For three weeks, March soybean oil futures in Chicago hovered 11.5% to 1 1,455/ton, the highest level since 2008, but over the past three sessions, they fell 4% to.1,389/ton.

March soybean futures have been rising in price for three consecutive weeks and during this time rose by 15% to the highest level since 2013 – 5 578/ton, in particular, over the past three sessions they have increased by 1.2%.

Prices for Brazilian and American soybeans in physical markets reached a 9-year high of 6 600-615/ton FOB. However, China, the world’s main importer of soybeans, remains calm and does not increase purchases of soybeans in the United States due to a reduction in production in Brazil.

The rapid growth of prices for palm and soybean oil did not lead to an increase in prices for black sea sunflower oil, as some buyers were afraid of possible Russian aggression against Ukraine and preferred to buy soybean oil.

Supply prices of black sea sunflower oil for delivery in February – March increased in three weeks by only 3 30-40/ton to F 1400-1405/ton FOB, but the market expects increased demand after the end of a long weekend in China.

Sunflower processing volumes in Ukraine and Russia in the first 5 months of the season are significantly lower than last year due to restraining sales by producers. Therefore, processors expect a sharp increase in supply and a significant reduction in sunflower prices in the near future.

Today, the USDA will unveil an updated balance of oilseeds and vegetable oils. Analysts expect that it will reduce the supply of soybeans and soybean oil, and the further price trend will depend on how much this is done.