Yesterday, quotes for palm oil fell by 6%, while soybeans rose by 3.7%

A sharp drop in oil prices and global demand is adding to the turbulence in vegetable oil markets, with palm oil and soybean oil trading in opposite directions yesterday.

Markets were largely unresponsive on Friday to a cut in the USDA's forecast of global vegetable oil production and stocks, as the changes only affected palm oil, but yesterday's decline in Dalian bourses led to a slide in Malaysia's bourse.

On the Chinese stock exchange in Dalian, soybean oil futures fell by 2.06% yesterday, and palm oil futures fell by 4.22%, which was the biggest decline since the end of September.

On Bursa Malaysia, February palm oil futures fell 6.36% yesterday to their lowest since Oct 14 at 3,741 ringgit/t (-14.5% month-on-month) or $847.53/t under downward price pressure on oil and demand in China. They were not even supported by surveyors' data on the increase in palm oil exports from Malaysia for December 1-10 by 5.6-14.3% compared to the same period in November.

At the end of the week, on the basis of the USDA report and against the background of the collapse of oil prices and forecasts of a drop in demand from the US biodiesel industry, January soybean oil futures in Chicago fell to the lowest level since July - 1322 $/t (-28% for the month). but yesterday recovered by 3.6% to $1,370/t.

February Brent crude futures rose 2.6% to $76/barrel on Monday amid speculative demand fueled by a 14.5% collapse at the start of the month.

Compared to the November estimates, the new balance on vegetable oils for the 2022/23 MR has undergone the following changes:

• The global production forecast was reduced by 1.36 million tons to 217.55 million tons, which will exceed the 208.95 million tons of the 2021/22 season by 4.1%. For palm oil, the estimate was reduced by 1 million t to 77.22 (73.83) million t due to a 1.23 million t reduction in the harvest in Indonesia.
• The estimate of world consumption was reduced by 1 million tons to 212.8 million tons, which will exceed the 204.2 million tons of the 2021/22 season by 4.2%.
• The forecast of world ending stocks was reduced by 0.45 million tons to 29.85 (29.43) million tons, in particular for Indonesia - by 0.7 million tons.

Oil prices were supported by information about the shutdown due to a leak in the Keystone pipeline with a capacity of 622 thousand barrels per day, which supplies Canadian oil from Alberta to refineries in the US Midwest and the coast of the Gulf of Mexico.

Russian Urals oil fell in price to $49/barrel. This indicates that the price ceiling for Russian oil works in accordance with the expectations of the G7 to limit Russian profits.

Today, the market should react to the news of science, as the US Department of Energy will announce that, for the first time in history, scientists at the National Ignition Facility of the National Laboratory named after Lawrence in the state of California managed to record a net increase in energy in the operation of a thermonuclear reactor, that is, in the process of a thermonuclear reaction, more energy was obtained than was needed to start it.

A thermonuclear reaction can become an inexhaustible source of energy and satisfy humanity's energy needs, since during synthesis the temperature of the plasma in the reactor reaches 150 million ^o C, which is 10 times higher than the temperature of the Sun.