End of July

Dear ladies and gents,

Please enjoy a fresh overview of the veg oil market.

Sunflower Seeds and Oil

The Ukrainian grain season for 2024/25 may see a significant downturn in agro exports. Due to abnormal July heat, Ukrainian farmers are harvesting sunflower seeds earlier, potentially causing a 25-35% yield drop. The Odessa and Dnipropetrovsk regions have reported yields of 0.79 tons per hectare, down from 2.17 tons last year. The forecast for sunflower production in Ukraine for MY 2024/25 has been lowered to 13 million tons, which is still considered optimistic by experts.

The global sunflower seed consumption and processing estimate was also reduced by USDA to 54.9 million tons and 50.8 million tons, respectively.

In Bulgaria, despite increased planting, lower yields are expected due to intense heat affecting plant development, seed size, and oil content. Bulgarian crushers are looking to import Ukrainian seeds, anticipating rising prices.

In Moldova, maize crops are reported to be compromised at 70-100%, and sunflower crops in the south at 60-80%. Prices in Ukraine continue to rise, with CPT levels reaching $940-$950, and Turkey offers crossing $1010 CIF Mersin. Sunflower oil prices in Europe for October, November, and December loading have risen, with offers at $1085 PMT against bids of $1070 PMT.

In Russia, the SFO export duty will remain zero in August. Russian stocks are sufficient to continue supplying India, China, Iran, and others. Bids from South Russia for CSFO are at $860 PMT, with seed buying ideas from crushers at $370 PMT. Refined SFO from Ukraine is still offered at $1000 FCA, with bottled oil prices growing to $1.08-$1.10 per liter.

Rapeseed & Canola

Rapeseed export prices in Ukraine are rising, with orders at 23000-23500 UAH/t (€485-€500/t) delivered to Black Sea ports. This is due to restrained sales and low yields, potentially reducing exports in the new season.

Canola prices are rising due to weather concerns, with seed prices surging by nearly $50 recently. PDN numbers remain stable, reflecting weather-driven market dynamics in Canada. Meanwhile, the current bid for rapeseed crude oil is between €830-€840 FCA for the EU market. However, missed opportunities to purchase more rapeseed earlier are negatively affecting crushers' profit margins.

Soybeans

In China, soybean bids have reached $1010. Soybean futures fell the most in a month as traders took profits and US weather forecasts improved.

For Russia, ICAR expects a record soybean harvest this year at 7.5 million tons, with increased loads at oil extraction plants. Last year's processing volumes were 6.2 million tons, expected to exceed 6.4 million this year. Soybean prices are expected to decline soon but currently remain high.

Meanwhile, Ukraine expects a record soybean harvest in MY 2024/25, which could pressure prices. Current levels are $420 PMT for non-GMO and $400 for GMO. The Ministry of Agrarian Policy of Ukraine predicts the soybean harvest in 2024/25 MY at 5 million tons.

Palm

Palm oil stock is increasing, and logistic concerns are easing, which will likely lower freight costs from KL and Indonesia. This will widen the gap between palm and sunflower oil, making palm oil more attractive and increasing demand, which will support the price. India and China are increasing palm oil imports.

Market Outlook

The coming season, with increasing reports of bad weather, is becoming very risky and unpredictable. With fewer seeds, crushers will raise prices, and major players may try to dominate the Ukrainian market, as Ukrainian oil retains an advantage due to Russian oil tariffs.

Reduced vegetable oil production in the EU will make the Ukrainian market more oriented towards the EU and keep prices high. At the same time, the demand for vegetable oil is increasing globally, which is likely to support future prices.

That's all the news for now. Thank you for your attention, and stay tuned in for the next update!