Quotations for soybean and palm oil remain stable, despite the drop in oil prices

Soybean and palm oil futures traded flat during the week, despite data on increased exports from Malaysia and a drop in canola and canola oil prices. Also, the markets did not react to the decrease in forecasts of the sunflower harvest in Ukraine and the Russian Federation due to the heat.

 

December soybean oil futures in Chicago rose 10% in early July, but then fell for two weeks to $993/t (+3% for the month) under pressure from favorable weather for the US soybean crop.

 

According to USDA's NASS, soybeans in the U.S. remain in good or excellent condition at 68% (54% last year), and crop development is 5% ahead of the 5-year average.

 

Active soybean exports from Brazil and increased supplies of soybean oil and meal from Argentina increase pressure on global quotations.

 

September palm oil futures on Bursa rose 1% during the week to 3,969 ringgits/t, or $850/t, despite a substantial increase in exports in July.

 

According to surveyors Intertek Testing Services and AmSpec Agri Malaysia, during July 1-20, Malaysia increased palm oil exports by 39.2-41.4% compared to the same period in June. Oil production is also increasing, but to a lesser extent, so lower inventories at the end of the month could lead to higher quotes.

 

According to Trading Economics, during the week the average price of sunflower oil with delivery to buyers increased by 0.5% to $910/t. Prices almost did not react to forecasts of a 15-20% decrease in the sunflower harvest in Ukraine and the Russian Federation and remain under pressure from an increase in the supply of rapeseed and soybean oil.

 

In Ukraine, demand prices for sunflower oil remain at the level of $900/t with delivery to ports and $830-850/t FCA - factory.

 

September Brent oil futures for the week fell by 3.3% to $81/barrel (-4.9% for the month) against the background of worse than expected data on the state of the US economy, which in the long run may reduce the demand for oil In addition, there is growing political uncertainty associated with Biden's refusal to run for President of the United States.

 

A drop in oil prices to $80/barrel and below will increase pressure on vegetable oil prices, as biodiesel producers have been the driver of recent price increases.