Rising soybean oil quotes halted falling palm and sunflower oil prices

A meeting between the leaders of China and the United States and agreements to improve trade relations between the countries led to a sharp increase in soybean prices in Chicago by 10% in a month, which provided support for soybean oil prices.

December soybean oil futures on the Chicago Board of Trade rose 3% to $1,125/t during the week, but rose only +1% overall over the month, as export prices for oil from the US face strong competition on the world market, limiting their further growth.

The rise in soybean oil quotes supported palm oil quotes, which have lost 10% in a month. But yesterday, December palm oil futures on the Bursa Malaysia exchange rose 0.7% to 4,138 ringgit/t or $979/t, despite data showing that Malaysian palm oil inventories rose to a 6.5-year high and exports slowed in November.

Falling palm oil prices continue to dampen Indian demand for all vegetable oils, including expensive sunflower oil. According to brokers, India has not purchased sunflower oil for the second week in a row, as the difference between sunflower and soybean oils on a CIF India basis was around $180/t, and with palm oil – around $200/t. In the Spanish and Dutch markets, the spread exceeded $120/t.

Prices for sunflower oil delivered to India decreased by $10/t to $1,320/t CIF Mumbai in a week, but supply continues to grow, so further price declines are expected.

Demand prices for sunflower oil in Ukraine also decreased by $10-20/t per week to $1,220-1,230/t with delivery to ports in November-December, but further decline is limited, as prices for Russian sunflower oil remain at $1,190-1,210/t FOB (with delivery in November-December).

Favorable weather for sowing soybeans and sunflowers in South America continues to put pressure on soybean prices and, accordingly, other oilseeds. In Argentina, sunflower production is forecast to increase, so the supply of Argentine sunflower oil at a low price of $1,170/t FOB is increasing on the market, which increases competition with Black Sea oil.

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