Mid January

Hello everyone,

Please enjoy a fresh overview of the global veg oil market.

Sunflower and Sunflower Oil

The global sunflower harvest is forecast at 50.51 M tons, with oil production at 19.96 M tons and meal at 21 M tons.

Key offers:

• Mersin (CIF): $ 1,140 PMT

• India: $ 1,180–1,200 PMT

• Ukraine (FCA): $ 1,000 PMT

Earlier in December, Ukraine’s sunflower crush dropped to a three-month low (down 12%), with only 1 M tonnes processed – 200,000 tonnes less than in November. Low farmer sales, high seed prices, and falling oil prices caused reduced production and exports.

In January, rising seed prices and weak demand from China, India, and Turkey worsened the situation. Crushers slowed or halted operations, with CPT buying levels at $ 1,110 PMT and RBD SFO offers at $ 1,190.

Despite this, the USDA raised its 2024/25 forecast:

• Sunflower harvest: 12.9 M tons (+0.4 M).

• Sunflower oil production: 5.4 M tons (+0,172 M), with exports at 5 M tons (+0,175 M).

Meanwhile, in Russia, SFO prices remain higher than CDSBO, with Ramadan demand falling short. The country’s SFO exports hit a record 5.46 M tons (+24%), accounting for 70% of its vegetable oil exports. Key buyers: India (2.17 M tons), Turkey (795k tons), and China (574k tons).

From February 1, 2025, Russia’s SFO export duty will exceed 18,000 rubles (~$181). Prices dropped after the holiday, ranging around 83–87 rubles/kg (excl. VAT). Further pressure on the local market is expected. Higher financing costs in Russia (bank rates at 21–22%) limit funds, creating discounts for cash deals.

Canola

Canada’s canola crop dropped 7% – down to 17.85 M tons in 2024, missing the September forecast of 18.98 M. Furthermore, the U.S.-Canada-China tensions add uncertainty to future pricing.

While Canada’s main oil markets remain the U.S. and China, China’s  ZCE RSO prices fell 4.37% due to an oversupply of Canadian canola seeds. Retaliatory tariffs worth C$150 billion are also possible if the U.S. imposes tariffs on Canadian imports.

Soybean

Global soybean prices are on the rise, with beans gaining $0.07-$0.15, meal – $2-$3, and oil – $0.50-$0.65. The spread has strengthened.

Argentine’s soybeans planting is 98% complete but hot, dry weather lowered ratings. BAGE maintains its production forecast at 50 M tons, compared to the USDA’s 51 M tons. With March ‘25 beans around the $9.50–$11 range midpoint, volatility is expected to rise as South America nears a record harvest.

CBOT Soybean Oil

• Risk: Fund positions near 90% max longs suggest bullish sentiment but risk corrections.

• Opportunity: Unwinding positions could trigger sharp price drops; watch CoT data and supply-demand changes.

Market Outlook

Overall, vegetable oil markets face volatility from rising costs, weak demand, and geopolitical tensions. While global production shows resilience, regional price pressures and South America’s harvest will shape near-term trends.

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