Soybean and palm oil prices started to fall after speculative gains earlier in the week

Against the background of a sharp speculative rise in prices, traders began to take profits, so quotes for the soybean complex on the Chicago Stock Exchange fell slightly, which led to a decrease in palm oil prices.

In the US, dry hot weather prevails in the soybean growing regions, and the forecasted precipitation for the next few days will be weak and uneven, so the weather factor will continue to put pressure on the quotations of the soybean complex.

U.S. officials on Wednesday increased the amount of biofuel that refineries must blend into the nation’s fuel balance over the next three years, but biofuel industry representatives said the amount was too low and they expected more.

On the Chicago Mercantile Exchange, July soybean oil futures fell 7% to $1,227/t from Wednesday, losing a weekly gain, although they added 16.7% to the price for the month. At the same time, July soybean futures yesterday fell by only 1% to $551.2/t (+4.9% for the week, +13.2% for the month).

August palm oil futures on Malaysia’s Bursa exchange were up 6.3% at the end of last week, but have fallen 4.6% since Wednesday to 3,562 ringgit/t, or $766/t, on data that exports fell in June, so weekly growth was only 1.2%.

Exports of palm oil from Malaysia for June 1-20 decreased compared to the same period in May by 16.8% according to surveyor Intertek Testing Services and by 12.9% according to AmSpec Agri Malaysia.

Following soybean and palm oil quotes, sunflower oil prices also fell by $15/t to $835/t delivered to customers.

The export of sunflower oil from Ukraine decreased by 21.6% to 93.4 thousand tons during the week, and in total reached 4.5 million tons in the season. By the end of the season, the country can export another 200-300 thousand tons of oil.

At the same time, the Russian Federation is increasing its export of vegetable oils, which puts pressure on global quotations. According to the estimates of the Oil and Fat Union of the Russian Federation, in 2022/23 the export of vegetable oils may reach a record 6.2 million tons, which will exceed the current season’s figure by 37%. Thus, compared to 2021/22 MR, the export of sunflower oil will increase by 900 thousand tons to 4 million tons, soy oil – by 562 thousand tons to 700 thousand tons, rapeseed oil – by 900 thousand tons to 1.5 million tons.

Experts expect that India will increase imports of palm oil by 46% from 439 to 640,000 tons in June (compared to May), soy oil by 40% to 445,000 tons, and reduce imports against the background of a drop in world prices to a 28-month low of sunflower oil by 19% to 240,000 tons as a result of the Russian blockade of Ukrainian ports. In May, palm oil imports were the lowest since February 2021 as it has recently traded at a premium to soybean and sunflower oils, prompting buyers to prefer cheaper oils.

India imports palm oil mainly from Indonesia, Malaysia and Thailand, and soybean and sunflower oil – from Argentina, Brazil, Ukraine and the Russian Federation.

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