A 4.3% drop in soybean oil prices puts pressure on palm and sunflower oil markets

After a speculative gain of 11% since the start of July, soybean oil futures fell yesterday amid an improvement in the state of the US soybean crop and traders taking profits.

August soybean futures on the Chicago Mercantile Exchange fell 4.3% to $1,020/t yesterday, giving up a week's gain but still remaining 5% higher than a month ago.

According to USDA's NASS, the number of U.S. soybeans in good or excellent condition increased 2% to 68% for the week (51% last year), which also increased pressure on soybean and soybean oil quotes.

September Brent crude oil futures for 4 sessions fell by 3.3% to $84.6/barrel (-2% for the week, +4.1% for the month), which also negatively affects quotations of vegetable oils and oil cultures

Awaiting the Malaysian Palm Oil Board's supply and demand report and following soybean oil prices, August palm oil futures on Bursa yesterday fell 2% to RM3,959/t or $841/t (-3.3% per week), as traders expect inventories to increase due to increased production and reduced exports. According to the average estimate of 12 planters, traders and analysts polled by Reuters, palm oil stocks rose by 4.53% to 1.83 million tons in June.

The average price of sunflower oil delivered to buyers during the week fell 0.8% to $920/t, amid increased competition from cheap palm oil in the Indian market and increased supply of canola oil in the EU, according to Trading Economics.