Late March

Hello everyone,

Please enjoy a fresh overview of the vegetable oil market.

🌱 Soybean Complex

Soybean complex showed uneven performance this week, with oils under pressure and meal still supported.

Soybeans (CBOT) corrected from the recent highs of ~12.25 down to the 11.60–11.70 range. As the market lacks bullish drivers, fund selling is evident and price action enters a sideways consolidation phase.

Soymeal continues to outperform the rest of the complex, stabilizing after prior declines and gradually recovering toward the 320+ range. Steady demand provides support, keeping the trend firm to mildly bullish.

Soyoil remained the weakest leg, dropping from ~67 c/lb to 64–65. Fund liquidation and weak demand signals prevailed, with limited support even amid stronger crude oil prices. Market structure remains a key signal, as spreads continue to favor meal over oil.

FOB basis levels in Argentina and Brazil stayed under pressure, though:

– Argentina showed some improvement from around –1450 to –1000,

– while Brazil remains weak around –1200 to –1300.

Oversupply in the physical market persists, suggesting soyoil is likely to remain under pressure in a possible 62–64 c/lb range. India remains active for April shipments, with container demand around $1,220. Ukraine offers are heard near $1,140 FCA, Russia remains more competitive. European demand is weakening, with reduced buyer interest. POGO has moved into negative territory, indicating palm oil trades at a premium to soyoil.

🇨🇳 China & 🌾 Canola

In China (DCE), the veg oil commodity complex is under a clear downward correction. Soyoil dropped from ~1,260 to ~1,235 USD/ton, while palm oil also softened. Soybeans and soymeal remain relatively stable, confirming that weaker sentiment is concentrated in the oil segment.

China’s soyoil inventories dropped to ~823k tons, down both weekly and monthly and below the 3-year average. However, soybean stocks remain up at ~8.16 MMT, well above historical averages.

Canola remains firm, holding elevated levels around the ~730 range after recent gains. Despite volatility, the market stays resilient, supported by tight supply and strong demand. Australian rapeseed exports remain strong, underpinning the market.

🌻 Sunflower Oil

Black Sea sunflower oil prices are gradually softening. Ukraine trades at ~ 1,335 USD/MT and Russia at ~ 1,325 USD/MT, reflecting mild downward pressure. Russian sunflower oil exports surged by ~50% YoY in early March, adding to the global supply pressure.

CIF Mersin market remained quiet due to holidays, with Ukraine offers at ~ $1,390 versus bids of ~ $1,375, and negotiations ongoing. In India, offers are around $1,430, while buying interest is seen closer to $1,380. CSFO stocks are increasing, adding near-term pressure.

The spread between CPT and FOB Ukraine is at its maximum. Ukrainian exports are lower (by ~25%), partially offsetting the increase in regional supply. Europe's prices remains significantly higher at ~1,450 USD/MT, indicating weaker competitiveness.

Argentina is active around 1,285–1,300 USD/MT, adding further pressure. Quality issues have been reported in Argentine sunseed, with pesticide levels above limits (third vessel affected, Bulgaria). This raises the risk of stricter EU controls and potential restrictions, which is bearish for Argentina and could widen discounts. Total exposure is already around 565 kMT (14 vessels).

🌴 Palm Oil & 🌍 Macro Factors

Palm oil prices on BMD remain firm at ~ MYR 4,600 (~$1,170/t), providing strong market support. RBD palmolein FOB Malaysia is stable at elevated levels around $1,200–1,220, while Indonesia remains discounted versus Malaysia, maintaining competitive pressure.

CPO FOB levels of around $1,240–1,260 form a high base that continues to support the entire veg oil complex. Palm oil is trading near parity with soyoil, limiting further upside, while tight spreads with competing oils increase substitution risk.

Malaysia exports surged by ~50% during March 1–20, tightening nearby supply. Stocks are expected to decline toward the end of the month, adding another supportive factor.

On the macro side, the US Dollar Index (DXY) strengthened toward the 100 level before easing slightly, continuing to act as a headwind for global commodities demand. EUR weakness, despite a minor rebound, reflects soft demand conditions in Europe, particularly for veg oils. The Malaysian ringgit showed volatility, with earlier weakness supporting exports and recent strengthening potentially capping further FOB price upside.

Brent crude oil surged above $100/bbl and remains the primary bullish driver across the vegetable oil complex, supporting biodiesel economics and overall price levels.

📉 Conclusion

The market is entering a correction phase, as momentum slows after the recent rally. Palm oil remains the key driver, supported by high crude oil prices and favorable logistics to core markets. In the US, weaker biodiesel demand is reducing overall support for the vegoil complex, while logistics in the GCC remain tight amid elevated freight rates and uncertain insurance costs. Overall, the market is macro-supported but structurally softer, increasing the risk of a near-term correction.

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