The price of vegetable oil falls ahead of USDA report

Possible decline in prices after the publication of the August USDA balance sheet amid declining demand intensifies pressure on the overheated markets of palm and soybean oil, followed by cheaper sunflower and rapeseed oil and, consequently, rapeseed and sunflower.

Quotations of palm oil remain the price indicator to markets of vegetable oils. After the speculative leaps of the last month caused by a possible decrease in production and increase exports, prices turned down under the pressure of fundamental factors – an increase in supply of soy and sunflower oil and reduce the demand for too expensive palm oil, primarily from India and China.

Futures on palm oil exchange in Malaysia this week declined by 4.4% to its lowest August level Ringgits 2643/t or 630,8 $/MT, despite a reduction in production for the first 10 days of August compared to July by 8%, as reported in palm oil Association southern Peninsula (SPPOMA).

Futures for soybean oil in the USA Monday fell by 1.7% to 668,4 $/t after the fall in the price of palm and Argentine soybean oil.

According to the Agency Agrisensus, Argentine soybean oil prices dropped $20/MT to the lowest level in 6 weeks level 715-720 $/t FOB Up River on the rumors about the cancellation of India which is its main buyer, several contracts for the supply of soybean oil from Argentina, and the acquisition of cheaper black sea oil.

black sea sunflower oil from the seeds of the new crop continues to fall on news of possible increase of export duties for sunflower seeds in Russia that will lead to the fall of prices for sunflower oil and increased production and export of sunflower oil.

Dry weather in Russia and Ukraine reduces the potential of the sunflower crop, but it will be quite significant due to the increase in acreage.

the prices of supplies of Ukrainian sunflower oil in October-December fell to 745-755 $/t FOB, and processors for supplies of sunflower to plant in September-October is now ready to pay 10800-11000 UAH/t

In case of further fall in vegetable oil markets prices for new crop sunseeds will continue to decline after the price of canola, which dropped for the week at the port on 500 to 700 UAH/t to 13700-13800 UAH/t