Soybean and palm oil prices continue to increase, despite lower oil prices

Against the backdrop of an increase in the US Fed’s interest rate to 5-5.25% and in anticipation of a recession in the US economy, traders are unwilling to invest in stocks and oil futures, as a result of which oil prices fell another 4-4.4% after the previous decline by 5-5.6%. At the same time, traders stepped up speculative purchases of soybean and palm oil, hoping for increased imports by China and India.

Yesterday, July Brent oil futures on the London ICE exchange fell another 4% to $72.4/barrel (-9.3% in two days), and WTI oil on the New York exchange fell by 4. 4% to $68.5/barrel (-10% in two days) as traders do not expect an increase in demand in the near future.

July palm oil futures on Bursa Malaysia rose 0.26% to 3,430 ringgit/t or $771/t yesterday.

July soybean futures on the Chicago Stock Exchange rose 1.5% to $1,159/t yesterday, as traders are more actively investing in agricultural assets than in oil, which continues to fall in price.

Under the pressure of low demand, sunflower oil prices fell by another $25/t to $950/t with delivery to buyers, but in Ukraine, after falling to a minimum level, demand for small batches with delivery to EU countries has recovered.

Against the background of equalization of prices of major types of oils, India reduced imports of palm oil and increased imports of soybean and sunflower. Thus, in April, compared to March, the import of palm oil decreased by 30% to a 14-month low of 508,000 tons, while the import of sunflower oil increased by 69% to 250,000 tons, and soy oil by 2.3% to 258,900 tons. v. For the first time since July 2022, the share of palm oil in the total import of vegetable oils was less than 50%, as the prices of sunflower oil were similar, or even lower, than the prices of palm oil.

So far, the main supplier of sunflower oil to India is Argentina, and Ukraine will be able to increase the supply of its cheap oil only if the grain corridor continues to operate.