Soybean oil prices rose during the week despite a neutral USDA report

The June USDA WASDE report on soybeans was quite bearish, while data from the Oilseeds: World Markets and Trade report was broadly neutral for the market. However, soybeans and soybean oil prices rose sharply at the end of the week, supported by both forecasts of hot weather in the US in the coming weeks and lower US soybean oil inventories.

July soybean futures rose 1.7% to $509.1 a ton (-0.3% for the month) on Friday after the reports on the Chicago Stock Exchange, but were down 0.9% on Monday, and July soybean oil futures rose 3.8% to $1,200 a ton (+10.6% for the week), but were slightly down 0.9% on Monday due to profit-taking by traders.

The increase in prices is due to higher demand, with the main driver of the increase in soybean oil prices being market information that the US Environmental Protection Agency (EPA) will make a decision on the Renewable Energy Sources Obligation (RVO) on June 14, which will increase demand for soybean oil in the US.

In the June USDA FAS report, the vegetable oil balance for 2023/24 MG was virtually unchanged.

The forecast of the world oil production for 2023/24 MG has been reduced by 0.51 million tons to 222.78 million tons, which will exceed the level of the 2022/23 season by 2.8%, and the estimate of world ending stocks of oils for 2023/24 MG has been reduced by 0 .25 million tons to 30.34 million tons, which almost corresponds to the level of the previous season, but is 4.2% more than the indicator of 2021/22 MY.

Palm oil futures on Malaysia's Bursa exchange also jumped 3.1% on Friday and were slightly down 0.5% on Monday at RM3,349/t or $730/t (-0.9% for week and -6.8% per month).

Data from the Malaysian Palm Oil Board, released on Monday, was slightly negative for the market.

Palm oil stocks in Malaysia at the end of May increased by 12.63% compared to the previous month to 1.69 million tons, and crude palm oil production for the month increased by 26.8% compared to April to 1.52 million tons, but exports of palm oil decreased by 0.78% to 1.08 million tons.

Demand prices for sunflower oil remain at a low level of $815-830 per ton (-4.5-6% for the month) with delivery to the buyer, but there is a slight increase in demand against the background of rising soybean oil prices and fairly high palm oil prices.