Sunflower prices in Ukraine have exceeded UAH 27,000/t with delivery to the factory, and farmers are restraining sales, although quotations may soon turn downwards

Global soybean and palm oil prices rose sharply last week amid a speculative surge in oil prices fueled by a possible escalation between Iran and Israel. It also supported sunflower oil and sunflower quotes.

In Ukraine, against the background of a limited supply of sunflower and the need to fulfill contracts for the supply of oil, the purchase prices for sunflower with an oil content of 50% rose to UAH 25,600-26,400/t at the end of the week with delivery to the factory, and processors were ready to pay UAH 27,000/t for an oil content of more than 52% t.

As of October 24, domestic farmers from 4.63 million hectares or 94% of the area harvested only 9.54 million tons of sunflower with a yield of 2.06 tons/ha, so processors are trying to purchase the largest possible amount of raw materials. Some factories switch to the purchase and processing of soybeans, which slightly reduces competition in the soybean market.

During the week, sunflower oil prices in the Black Sea ports increased by another $20-30/t to $1,080-1,100/t, while meal prices fell by $3-5/t to $215-222/t following a fall corn prices and against the background of increased soybean meal supply.

Yesterday, December Brent oil futures fell by 6.3% to $71.5/barrel, which corresponds to the level of last month, before the start of Iran's shelling of Israel. This drove down soybean and palm oil prices.

December soybean oil futures on the Chicago Stock Exchange fell 3.5% to $940/t yesterday (+0.7% for the week, -1.4% for the month) following the fall in soybean prices, which improved production forecasts in Brazil fell by 9% for the month.

December palm oil futures on the Malaysian exchange fell 1.6% to 4,529 ringgit/t, or $1,043/t, after renewing a 2.5-year high yesterday.

Falling oil prices will accelerate the decline in vegetable oil quotes, so farmers would be better off selling high-priced sunflowers instead of waiting for mills to cut processing with negative margins caused by lower oil prices.