Mid June

Hello everyone,Please enjoy a fresh overview of the vegetable oil market.

🫘 Soybean Oil

Soybean oil market remains under pressure despite strong physical demand in several destinations.

CBOT soybean oil corrected sharply over the past two weeks, falling from nearly 80 c/lb to around 74–75 c/lb. In contrast, FOB Argentina values continue to hold near $1,180–1,190/MT, highlighting a disconnect between futures sentiment and physical demand.

Argentina has increased its 2025/26 soybean production forecast to 51.5 M tonnes, adding to broader supply expectations.

India remains the key market to watch. Domestic edible oil inventories continue to tighten, and imports may need to increase in the second half of 2026. Market participants expect soybean oil imports to remain around 480k–520k MT per month.

🌻 Sunflower Oil

Sunflower oil market remains significantly stronger than soybean and palm, despite recent volatility across the vegetable oil complex.

Ukraine's sunflower oil exports fell below 400k MT in May and continue to run below last year’s pace. For the September–May period, total exports are approximately 385k MT lower year on year, as reduced availability from the Black Sea region continues to provide underlying price support.

Current FOB sunflower oil values remain firm:

– Ukraine: $1,380–1,390/MT FOB

– Russia: $1,370–1,380/MT FOB

– Argentina: $1,310–1,320/MT FOB

Unlike soybean oil, sunflower oil has seen only limited correction, despite weakness in CBOT soybean oil and fluctuations in palm oil markets.

Additional support is coming from Europe. According to FEDIOL, EU sunflower seed crushing in April declined by 23% month on month to reach 339k MT — the lowest level since August 2025. Lower crushing activity implies reduced sunflower oil production and tighter availability.

India remains an important destination. While imports may temporarily slow due to comfortable inventories, sunflower oil continues to trade at a substantial premium to palm oil, indicating resilient demand despite higher prices.

Geopolitical uncertainty, logistics disruptions, and lower Black Sea exports continue to underpin the market. Rising tensions in the Middle East and disruptions around the Strait of Hormuz are also supporting crude oil prices and biodiesel economics.

🌱 Rapeseed / Canola Oil

Rapeseed and canola remain among the strongest oils in the global veg oil complex.

Canadian canola futures continue to trade at elevated levels, with deferred contracts holding above nearby months, suggesting the market is not pricing in a significant supply surplus. European rapeseed oil prices also remain firm, supported by biodiesel demand and steady consumption.

Relative strength across oils:

– Sunflower oil is strongest, supported by lower Ukrainian exports, reduced EU crushing, and tight Black Sea availability

– Rapeseed / canola oil is second strongest, supported by biodiesel demand and firm futures

Current Dutch FOB rapeseed oil values:

– June: EUR 1,400/MT

– July: EUR 1,295/MT

– August: EUR 1,210/MT

Canadian canola futures remain firm:

– July: CAD 765/MT

– November: CAD 773/MT

– January 2027: CAD 781/MT

🌴 Palm Oil

Palm oil remains the cheapest major vegetable oil and continues to dictate the direction of the global vegetable oil complex.

Current market levels:

– BMD palm oil (3rd month): MYR 4,479/MT

– Malaysian RBD palmolein July FOB: $1,145/MT

– Malaysian CPO July FOB: $1,207/MT

– Indonesian palm oil FOB: $1,110–1,120/MT

Palm oil has corrected from recent highs despite support from the energy market and Indonesia’s biodiesel program. Malaysian stocks are expected to rise above 2.3 MMT, increasing nearby supply and limiting upside potential.

Key bullish factors:

– Indonesia’s B50 biodiesel program continues to divert palm oil into domestic use

– Higher crude oil prices support biodiesel economics

– Indian edible oil inventories are tightening ahead of H2

– Seasonal festive demand in India is expected to improve in Q3 and Q4

– Indian industry leaders expect edible oil prices to remain firm for the next 5–6 months

Key bearish factors:

– Rising Malaysian palm oil stocks

– Seasonal production increases across Southeast Asia

– Inconsistent export demand

– Uncertainty around Indonesia’s export system, potentially increasing availability

– Buyers remain cautious and continue hand-to-mouth purchasing

Palm oil remains approximately:

– $40–60/MT cheaper than soybean oil

– $230–250/MT cheaper than Black Sea sunflower oil

– EUR 150–250/MT cheaper than rapeseed oil

This significant discount continues to attract demand from price-sensitive buyers, particularly India, Pakistan, Bangladesh, and Africa.

Palm oil remains the most competitively priced vegetable oil globally. In the short term, rising Malaysian stocks and seasonal production growth may cap upside above MYR 4,700–4,750. However, strong biodiesel demand in Indonesia, firm crude oil prices, and improving Indian import demand should provide support on price declines.

Market view:

– Short term (2–6 weeks): Neutral

– Medium term (Q3 2026): Neutral to bullish

– Support: MYR 4,450/MT

– Resistance: MYR 4,700–4,750/MT

While palm oil is not the strongest oil fundamentally, it remains the key price leader due to its discount versus soybean, sunflower, and rapeseed oils, which continues to drive global demand flows.

🌍 Macro & Freight

The US Dollar Index (DXY) remains around 99.8–100.0. A stronger dollar typically limits commodity rallies by making imports more expensive, remaining a bearish macro factor for vegetable oils.

The Baltic Dry Index continues to weaken. Lower freight rates reduce delivered costs for importers and increase competitiveness among exporters, which is slightly bearish for FOB vegetable oil prices.

The Russian ruble remains relatively strong around 71–73 per $, reducing margins for Russian exporters.

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