Soybean oil quotes in Chicago continue to decline, but the vegetable oil market remains generally stable

The further decline in oil prices has not yet led to the expected significant pressure on the vegetable oil market. Due to active demand and seasonal supply, most major vegetable oils maintain relatively stable price positions.

August Brent crude futures have fallen 2.6% to $77/barrel in the past seven days and are currently trading just 11% above their pre-Iranian levels. However, market participants do not expect further significant price declines as many countries and companies continue to build up strategic oil reserves, given the risks of a fragile truce between the United States and Iran collapsing.

The palm oil market continues to show upward momentum. August palm oil futures on the Bursa Malaysia exchange rose 1.9% during the week to 4,658 ringgit/t or $1,126/t. However, due to the further strengthening of the Malaysian ringgit, dollar quotes effectively remained at the level of two weeks ago.

The market was supported by a 19-25% increase in palm oil exports from Malaysia between June 1 and 20, as reported by local inspection agencies. The market barely reacted to the decline in oil prices, indicating fairly stable current demand.

Meanwhile, the soybean oil market continues to be under pressure. July soybean oil futures on the CBOT exchange fell another 3.5% to $1,553/t during the week, and have already lost 12% of their value since the beginning of June. The main reason remains the oil market correction, which reduces the attractiveness of the biofuel sector.

Despite this, US soybean oil prices are still 15.6% higher than before the conflict in the Middle East. Prices are supported by limited supply of raw materials for biofuel production in the US. At the same time, the supply of soybean oil from South America continues to grow on the world market, which limits the potential for price recovery.

Prices in the Asian market remain relatively stable. Dalian (China) soybean oil futures for July delivery have remained almost unchanged during the week and are trading at $1,225-1,230/tonne. A similar situation is observed in the Brazilian spot market, where prices remain in the range of $1,210-1,230/tonne FOB.

The sunflower oil market remains more tense due to seasonal supply reductions from the Black Sea region. As a result, demand prices in India have increased by $10/t to $1,425–1,435/t CIF Mumbai over the past week.

At the same time, Russian sunflower oil fell by $10–15/t to $1,280–1,290/t FOB under the influence of an increase in the supply of new crop rapeseed oil.

In Ukraine, the demand prices for sunflower oil with delivery to Black Sea ports increased by $10–15/t to $1,325–1,330/t in a week. The main supporting factors remain the reduction in production and the low supply of sunflower on the domestic market.

The rapeseed oil market continues to decline. In the EU, rapeseed oil quotes have dropped to $1,450/t FOB Netherlands as the new rapeseed processing season approaches. Additional pressure is exerted by the weakening of the euro against the US dollar.

The increase in rapeseed oil supply in July-August is expected to partially offset the seasonal reduction in sunflower oil supply. In addition, forecasts of a significant increase in the sunflower harvest in the new season continue to put pressure on the forward market. Already, new-crop sunflower oil is being offered at around $1,200/t delivered to Black Sea ports, indicating expectations of a more comfortable supply balance in the 2026/27 season.