US soybean oil rally supports global vegetable oil market

Vegetable oil prices have received support from a sharp rally in US soybean oil futures and higher crude oil prices. December soybean oil futures in Chicago rose 2.3% in a day to $1,600/t, gaining 7% over the week and returning to their June-July highs. Additional support came from the EPA’s decision on biofuel credits, which reduced uncertainty over future renewable fuel demand.

Strong soybean processing in the US is also supporting the market. Soybean crush increased by 1.9% month-on-month in July to 6.04 mln tons, up 8.2% from a year earlier. Meanwhile, soybean oil stocks declined by 6.4% from June to 891 thsd tons. Brent crude is providing further support after gaining 9% over the week to $94.8 per barrel.

Palm oil prices are also strengthening. November futures in Malaysia gained 0.5% over seven days to $1,231/t and were up 7.2% over the month. Oil World forecasts global palm oil exports to decline to 48–49 mln tons in 2026/27 MY from 50.5 mln tons a season earlier due to slower production growth and rising domestic consumption, particularly for biofuel production.

Meanwhile, the Black Sea sunflower oil market is moving in the opposite direction. In Ukraine, bid prices fell by $30–40/t over the week to $1,250–1,260/t delivered to Danube ports amid increased shipment risks. Russian sunflower oil for September delivery also declined by $30–40/t to $1,280–1,290/t FOB. At the same time, sunflower oil prices in India remain high at around $1,470/t CIF Mumbai.

European rapeseed oil prices increased by $25–30/t over the week to $1,415–1,425/t FOB Netherlands, following gains in rapeseed and canola markets. Further growth, however, is being limited by supplies of cheaper Ukrainian rapeseed and sunflower oils. Global vegetable oil prices are currently near their highest levels in 3–3.5 years, although a seasonal increase in supply could put additional pressure on the market.

Tags: edible oils, global market, soybean oil, prices, Vegetable Oil, USA