Quotes for palm and soybean oils are slightly lower due to increased production

Over the past week, quotations for palm and soybean oil showed a slight decline amid data on production growth in Malaysia and the completion of the soybean harvest in Brazil and Argentina, which increased the supply of soybean oil.

According to estimates by Kuala Lumpur-based consulting and trading firm The Farm Trade, palm oil production in Malaysia in May rose sharply by 13.48%, which will lead to an increase in palm oil stocks in Malaysia to a three-month high, despite fairly good exports in May.

August futures for palm oil on the Bursa exchange in Malaysia for the week decreased by 4% to 3917 ringgit/t or 830 $/t, despite the trend of recovery in oil prices, but reacting to the slowdown in exports.

According to the cargo surveyors Intertek Testing Services and AmSpec Agri, the export of Malaysian palm oil products from June 1 to June 10 decreased by 20.4% and 21.6%, respectively, compared to the period from May 1 to May 10.

Local analysts note a further increase in production in June, and according to LSEG’s forecast published on Friday, dry weather “will continue in the palm oil producing areas of Sumatra and West Malaysia”, while periods of high humidity “may favor palm growth in the palm oil producing areas of Kalimantan and Sabah”.

On the Chicago stock exchange, the July futures for soybean oil for the week decreased by 1.3% to 961 $/t (-3.3% for the month), and December – by 1.6% to 971 $/t (-4.3%) amid increasing rates of soybean planting in the United States. As of June 9, sown 87% of the planned area against 84% on average for 5 years, and the condition of crops is estimated as good and excellent on 72% of the area against 59% last year.

The stabilization of oil prices will keep vegetable oil prices from declining significantly.

August futures for Brent crude oil on the London ICE Futures exchange for the week rose by 4% to 81.5 $/barrel (-1.6% for the month), almost completely offsetting the decline in the previous week amid strong news on the US economy, news about the increase in global air travel and demand for fuel, the strengthening of the dollar, as well as the statement by Saudi Energy Minister Prince Abdulaziz bin Salman that OPEC+ may suspend or cancel its decision to increase oil production if prices fall.

Tags: soybean oil, prices, palm oil