Oilseed prices rise following US soybean oil prices

During the week, soybean oil quotes in Chicago showed the largest increase, which was a result of the EPA's decision on biofuel credits in the US, and the sharp increase in oil prices from Monday will support prices for other oils.

 

November Brent crude futures rose 9% for the week to a 1.5-month high of $94.8/barrel amid renewed missile strikes between the US and Iran and expectations of a new blockade of oil shipments through the Strait of Hormuz, which continues to support high demand for biofuels and prices for vegetable oils and oilseeds.

 

On Monday, the US Environmental Protection Agency (EPA) decided to grant 29 exemptions for small refineries (SREs) for 1.76 billion RINs with a simultaneous 100% reallocation of this difference from the 2025 obligation to 2026-2027, which removes uncertainty with biofuel demand and ensures that physical demand for renewable fuels will not be lost, but only shifted to subsequent periods.

 

December soybean oil futures on SWOT rose 2.3% yesterday to $1,600/t (+7% for the week, +6.7% for the month), returning to the maximum levels reached in June-July, in anticipation of further strengthening demand from processors.

 

Soybean processing in the US in July increased by 1.9% compared to June to 6.04 million tons, which is 8.2% higher than the July 2025 figure, indicating active demand for soybean oil. At the same time, soybean oil stocks decreased by 6.4% compared to June to 891 thousand tons, which is 4.7% higher than last year.

 

During the week, spot soybean oil prices in Brazil decreased by $10/t to $1,195-1,210/t FOB, while soybean oil futures in Dalian (China) increased by $15-20/t to $1,320-1,330/t, supported by rising soybean prices in the US and Brazil.

 

November palm oil futures on Bursa Malaysia rose 0.5% to 4,973 ringgit/t or $1,231/t (+3.2% in two weeks, +7.2% in the month) in the past 7 days on the back of rising oil prices and strong demand from importers. However, it should be noted that due to forecasts of a reduced palm harvest, February and March palm oil futures are trading 4.5-5.5% higher.

 

According to Oil World forecasts, in 2026/27 MY, global palm oil exports will decrease compared to the previous season from 50.5 to 48-49 million tons. It reached its peak of 55.4 million tons in 2018/19 MY, after which it began to decline against the backdrop of a slowdown in the pace of production growth and a significant increase in domestic consumption of palm oil as a raw material for biofuel production, especially in Indonesia.

 

Demand prices for sunflower oil in India have not changed during the week and remain at a high level of $1,470/t CIF Mumbai due to supply restrictions from the Black Sea region.

 

Demand prices for Russian sunflower oil for delivery in September decreased by $30-40/t to $1,280-1,290/t FOB during the week amid restrictions on vessel access to Black Sea ports due to shelling and a drop in sunflower prices due to a good harvest and export blockade.

 

In Ukraine, demand prices for sunflower oil also fell by $30-40/t to $1,250-1,260/t for delivery to Danube ports during the week due to constant shelling and increased risks during shipment.

 

Against the backdrop of rising rapeseed and canola prices, European rapeseed oil quotes increased by $25-30/t to $1,415-1,425/t FOB Netherlands during the week, but their growth is limited by the increase in the supply of cheap rapeseed oil from Ukraine and sunflower oil.

 

We expect that the resumption of negotiations between Iran and the USA will lead to a sharp decline in oil prices, which, against the backdrop of a seasonal increase in supply (especially cheap oil from the Russian Federation and Ukraine), will increase pressure on vegetable oil prices, which are currently at their highest levels in the last 3-3.5 years. Therefore, we advise Ukrainian farmers to sell rapeseed and soybeans for export, and processors to fix high prices for vegetable oils.