Ukrainian market review from Spike brokers

The global vegetable oil market remained relatively stable during the week. Palm oil prices on Bursa Malaysia rose 0.2%, supported by the energy market, and soybean oil prices on the Chicago SWOT rose 1.29%.

 

Sunflower oil prices on FOB Northern Europe remain at $1,467/t, indicating a balance between supply and demand. At the same time, sunflower prices in Ukraine on the basis of CPT parity Odesa (processing) increased from $687 to $696/t against the backdrop of restrained sales by farmers and increased competition between processors.

 

May rapeseed futures on Euronext rose to €511.25/t during the week on stable demand from biodiesel producers. However, demand for rapeseed in the European physical market is falling as some plants operate at reduced capacity or switch to processing soybeans and sunflowers.

 

The increase in rapeseed supply on the market has reduced the physical premium for the old crop to almost zero, and some batches of Ukrainian rapeseed remain unsold, which increases pressure on prices in the EU.

 

World soybean prices remain stable, although in Ukraine soybean prices at the Odesa CPT parity (processing) increased from $477 to $479/t due to active demand from processors, driven by stable exports of processed products - soybean meal and oil.

 

SWOT corn prices have increased by $7/t since the start of the war with Iran. In addition, they are supported by forecasts of a reduction in sowing areas in the USA in favor of soybeans, a delay in sowing in Brazil and high export demand. The corn market in Ukraine reacted cautiously to the war in the Middle East - export prices at the Odesa CPT increased by $3/t to $213/t.

 

The pace of corn exports from Ukraine in March is lower than in February, which corresponds to seasonal dynamics and may lead to an increase in carryover stocks. As of March 12, 1.13 million tons of corn were shipped, mainly to Turkey, Italy, Egypt, Spain and Libya.

 

At the same time, traders' increase in long positions in anticipation of a prolonged war supports quotes.

 

Wheat prices on Euronext traded at €203-212/t during the week, supported by the war with Iran and rising energy prices.

 

Prices for Russian wheat increased by 12.5% to $239-240/t FOB, and for Ukrainian wheat by 11.5% to $237-238/t FOB. However, importers are holding back purchases due to high freight costs and uncertain market conditions.

 

In Ukraine, based on the Odesa CPT, wheat prices increased by 11.5% from $218 to $219/t, and feed prices from $210 to $214/t, indicating moderate demand against a backdrop of limited supply.

 

During March 1-12, Ukraine exported 232.9 thousand tons of wheat, of which 93 thousand tons to Algeria, 69 thousand tons to Egypt, and 31 thousand tons to Israel, which indicates continued demand from North African and Middle Eastern countries.

 

At the same time, the pace of shipments is inferior to the export potential, so in total, deliveries in March may amount to only 600 thousand tons, which will increase the volume of transitional stocks.