Futures for vegetable oil continues to go up due to speculators

July futures for palm oil rose yesterday by 1.8% to 542,4 $/t with the support of the oil market, which expects positive news from today's meeting of OPEC+, and due to lower production in Malaysia.

Speculators use the factor closed palm plantation and do not take into account the decline in demand from China and India, hoping that it will be short-lived. Low demand is partially compensated by the reduction sentences as palm oil and soybean and soybean oil due to logistical problems in Brazil and Argentina.

Malaysia has reduced exports of palm oil in China is 17%, so the duration of the outbreak the demand is likely to remain low because palm oil stocks in China at the end of February stood at 1.05 million tonnes, which is the highest since the 2018 level.

According to experts from The Solvent Extractor’s Association of India, in March India reduced its imports of vegetable oils by 32% to 941.2 thousand tons compared to 1.39 million tons in March last year.

Also export still did not appreciate the decrease in demand for palm oil from the biodiesel industry, where due to low oil prices processing margins turned negative.

Quotations of vegetable oils increase, but the market is waiting for the April USDA report, which will assess the reduction of demand for vegetable oil from China after the imposition of quarantine in January 2020

Futures soybean oil in Chicago yesterday rose 1.1% to a monthly high of 610 $/t in anticipation of increased demand ahead of Ramadan. At the same time the price of soybeans was left unchanged at the background of the completion of the harvest quite abundant crop in Brazil.

According to the Agency Arc Mercosul, as of the beginning of the week in the country the soybeans were collected with 86.2% of space compared to 85.4% of the on this date last year and 79.9% on average for 5 years. For the first time this year, the pace of harvest has exceeded last year's.

Powerful rain, which passed last week will allow farmers to accelerate planting corn second crop and improve the prospects of its yield.