Soybean and palm oil prices remain stable despite falling oil prices

During the week, futures for soybean and palm oil traded at a stable level, despite data on increased exports from Malaysia and falling prices for rapeseed and rapeseed oil. The markets also did not react to lower sunflower harvest forecasts in Ukraine and Russia due to the heat.

December futures for soybean oil in Chicago in early July rose by 10%, but then within two weeks fell to 993 $/t (+3% for the month) under pressure from favorable weather for soybean crops in the United States.

According to the NASS USDA, in the United States the number of soybean crops in good or excellent condition remains at 68% (54% last year), and the development of crops by 5% ahead of the average 5-year average.

Active exports of soybeans from Brazil and increased supplies of soybean oil and meal from Argentina increase pressure on world prices.

September futures for palm oil on the Bursa exchange during the week rose 1% to 3969 ringgit/t or 850 $/t, despite a significant increase in exports in July.

According to the surveyors Intertek Testing Services and AmSpec Agri Malaysia, during July 1-20, Malaysia increased exports of palm oil compared to the same period in June by 39.2-41,,4%. Oil production is also increasing, but to a lesser extent, so the decline in stocks at the end of the month may lead to higher prices.

According to Trading Economics, during the week the average price of sunflower oil for delivery to buyers increased by 0.5% to 910 $/t. Prices almost did not react to the forecasts of reduction of sunflower crop in Ukraine and Russia by 15-20% and remain under pressure from the increased supply of rapeseed and soybean oil.

In Ukraine, demand prices for sunflower oil remain at the level of 900 $/t with delivery to ports and 830-850 $/t on FCA – plant.

September futures for Brent crude oil for the week fell by 3.3% to 81 $/barrel (-4.9% for the month) amid worse-than-expected data on the state of the US economy, which in the future may reduce the demand for oil. In addition, political uncertainty is growing due to Biden’s refusal to run for the US presidency.

A decline in oil prices to $80/barrel and below will increase pressure on vegetable oil prices, as biodiesel producers have been driving price growth in recent years.

Tags: soybean oil, prices, palm oil, sunflower oil