Late June

Dear Ladies and Gentlemen,

I recently had a great opportunity to attend the Seville Veg Oil Conference, where we discussed the new season, end-of-season perspectives, and EU opportunities for 2024/2025.

Key Takeaways:

Sunflower Seeds

Global Supply of SFS is forecasted at 60.58M mt.

Ukraine’s stocks are very light and could be nearly depleted by July, with only 6% available until the end of the season. The country's market is holding sales as crushers wait for price reductions.

Meanwhile, refined SFO in Ukraine remains above $1000/mt, appearing high compared to rapeseed and soy oil offers. This trend may pressure Ukraine's RBD oil prices in the coming months.

Russia continues to dominate sunflower seed production and will start the new season with available old-crop seeds.

Global Market Trends

While Russia is the EU’s largest supplier of rapeseed meal right now, Europe can import significant quantities of rapeseed from Ukraine.

A new duty structure will close Russian and Belarusian vegetable oil and meal exports after July 1st.

Chinese oil trading levels decline, anticipating Russia to export its entire volume to the country.

Rapeseed

The main buyer of rapeseed oil is China, while the EU and UK buy the most rapeseed meal.

Rapeseed forecasts for both the EU and Ukraine are lower than last year, raising questions about how much Canadian rapeseed will go for biodiesel in the USA, especially considering Australian dry weather that contributes to bullish rapeseed prices.

Soybean

Global soybean production is forecasted at 506M mt, with Brazil and Argentina producing 152.248M and 48.694M mt, respectively.

Soybean oil are trading below SFO, presenting a good perspective for SBO .

Egypt recently bought local SBO volume at $969/mt, while the lowest level for CSFO is $990/mt offered at Mersin. 

Challenges and Opportunities:

Ukraine faces ongoing issues with electricity supply, potential new tax structures for petrol and diesel, and ongoing mobilization, all of which disadvantage .

Olive oil production has slightly recovered though still low, with an average price above €8000 PMT.

Market Insights

Crude Oil is currently lagging, with predictions of continued decline.

Palm Oil is competing with SFO and SBO, with weak future outlooks.

Upcoming Trends

Liquidity on the selling side is limited, but May exports hit a record, with India buying 500k mt of SFO for June delivery.

India is entering its festival season from August to December, with lower oil stock levels.

China is expected to enter the market in the first half, exerting pressure for October-November shipments ahead of the Chinese New Year.

Specialty Oils

Farmers are not selling HOSO seeds, maintaining a premium of €100-110 over regular sunflower oil. Ukraine will start crushing HOSO from December onwards, with second-half season premiums potentially increasing by $150.

I have included as much data from the conference as possible and updated some new information. 

Thank you .