Late November

Dear Ladies and Gentlemen,

Last week, I attended GGG 2024, a fantastic gathering where industry leaders discussed major issues, such as the new U.S. administration, China’s economic influence, and the Ukraine-Russia war. 

So, here’s a brief market update.

Grains

Grain prices have dropped, reaching multi-year lows. Global wheat stocks are low, and feed usage is declining, though protein surpluses are high. India is considering rebates for vegetable meal exporters to manage this.

Sunflower Market in Ukraine

Ukraine’s sunflower seed harvest may drop to 10.8M tonnes, with the agro ministry estimating ~1.5M tonnes unreported by farmers. Most of the CSFO exported is from unofficial SFS. For a week now, customs have halted unofficial exports, leaving containers stranded and creating liquidity issues that are likely to push prices up soon. 

MEanwhile, starting from December 1st, Ukraine will remove export licensing and introduce monthly minimum prices set by the Ministry of Agrarian Policy, allowing only registered VAT payers to export.

Current market prices are as follows:

• Sunflower oil (DAP Odessa): $1,165

• Sunflower meal (border): $228.50

• RBD sunflower oil: $1,260 EXW

• CDSBO: $1,050 EXW

• CRSO: $1100 FOB 

Seed prices for crushers are dropping, now at ₴26,000 in Poltava. Farmer sales remain low, with minimal crusher coverage since the season began.

Sunflower Market in Russia

As of November 11, Russia has harvested 13.9M tonnes of sunflowers. After 17 months, the SFO export duty has been reinstated at ₽2,900 and will rise to ₽8,000 by December and ₽15,000 by January, with additional duties to be imposed if domestic prices don’t stabilize. 

Current prices are as follows (central Russia): 

• Sunflower seeds: ₽48,500 (~$486)

• Canola: ₽45,000 (~$451) 

• Soybean:  ₽47,400 (~$475) and ₽48,400 (~$450), depending on protein content.

 Canola is now an undervalued option in the vegetable oil market.

Global Vegetable Oil Trade and Policy

India’s CIF sunflower oil trades at $1,280 per metric ton. 

China has high demand, with prices as follows:

• Sunflower oil: CN¥ 8,350 (~$1,154) – December/January

• Canola oil: CN¥ 7600-7650 (~$1,050-$1,057) – December / January

• Russian-origin sunflower oil: CN¥ 8,500 (~$1,175) CIF – November / December

• Russian-origin canola oil: CN¥ 7700 (~$1,064)

Australian canola exports totaled 6.13M tonnes in 2023/24. 

From December 1, China’s removal of tax rebates on used oil products may further tighten the supply.

Market Outlook

The global grains and oils markets remain impacted by regulations, supply chain disruptions, and geopolitical factors. With Ukraine’s export limits and Russia’s rising duties, as well as China’s tax changes, higher prices and tighter liquidity are likely in the coming months.