Prices for oilseeds remain under pressure from rising supply

Oil markets remained oversupplied and uncertain this week, with demand prospects due to rising covid-19 cases in China and Japan, as well as possible lower oil prices if OPEC+ raises production quotas.

Palm oil, the most sensitive to oil price movements, initially rose sharply this week, but eased towards the end of the week and was up 3.7% overall since Friday at 3,720 ringgits per tonne, or $836 /t, which is still 11.8% lower than two weeks ago.

Huge palm oil supplies from Indonesia will continue to weigh on markets in July and August until the massive stockpiles created by the government's export bans in April are depleted.

Palm oil continues to win the competition for a share of the global vegetable oil market, given its cheapness and availability. Soybean oil also receives additional price bonuses due to low offers from sunflower oil.

September soybean oil futures on the Chicago Mercantile Exchange jumped 5.4% on Monday after a prolonged 5-week decline, but were lower all week and hit $1,288/t yesterday, down 2.5% for the week and down 5. 5% for two weeks.

The prices of sunflower oil in Ukraine rose slightly after last week's fall and were offered at a price of around $1,250-$1,500/t DAP Poland, Bulgaria, Germany, Italy, which is marked by increased demand from consumers in Western Europe.

August rapeseed futures on the Paris MATIF for the week fell by 8.3% to 623.75 €/t or $636/t, (-11.2% in two weeks) against the background of increasing offers in the EU and from Ukraine. Rapeseed quotations fell to February 18-19, 2022 levels, but are still 50% higher than a year ago at €442/t.

Favorable weather in Canada is helping to produce a good canola crop, so November canola futures for the week fell 6.2% to CAD793/t or $615/t (-7.8% for two weeks and -17.5% a year ago).

The purchase prices for rapeseed in Ukraine remain at around $380-450/t with delivery to Danube ports or $520-600/t DAP Poland, Germany, but yesterday the NBU sharply raised the official exchange rate of the dollar to the hryvnia from 29.25 to 36. 56 hryvnias/dollar, which automatically raised purchase prices in hryvnias by 25% from levels of about 10-11,000 hryvnias/t free-elevator to 12,500-13,500 hryvnias/t.

September Brent crude oil futures fell 2.9% yesterday, but overall for the week they rose 3% and remain at $104 per barrel, the same as two weeks ago.

Falling global oil prices and rising gasoline inventories in the US have pushed US gas station prices down to a 3-month low. The resumption of oil supplies from Libya and Russia, amid a promise to increase supplies by OPEC+ countries, which meet on August 3, continues to keep oil prices from rising, but there are fears of an increase in covid cases in China, Japan and the United States, which could reduce demand for oil, and this, in turn, can push quotations down.