Start of the Year

Hello everyone,

Please enjoy a fresh overview of the food oil market.

🇺🇦 Ukraine & Black Sea Oils

A drone strike hit the Bunge plant in Dnipro, causing a significant oil leak. Reports indicate over 300 tons of oil spilled onto nearby roads. Bunge Dnipro is one of Ukraine’s first RBD oil plants. At its peak, the Oleina brand produced there accounted for more than 50% of Ukraine’s bottled oil market.

Now, back to the market situation.

Ukraine’s SFO trades as follows:

– Buying $1,218–1,220 CPT POC

– Selling $1,315–1,320 CIF Mersin

Sunflower meal shows a wide spread, with buying between $218 CPT and $265 CIF Egypt, while sellers are quoting up to $285 CIF Med.

The Black Sea market remains quiet due to holidays and poor weather. RBD SFO reached a minimum around $1,310 FCA. Ongoing logistics disruptions continue to slow port operations, while war insurance has increased to around 1.5% and is fully added on top of cargo / CIF export prices.

January exports from both sides are at minimum levels. Russia’s export duty is expected to be around $140/MT in February.

EU supply remains tight, keeping prices at a strong premium to the Black Sea, while demand stays firm. Argentina’s prices are lower but gradually firming, though global impact remains limited due to distance and logistics.

🌱 Soy Complex

Soybeans remain under pressure, as strong US crush rates and an improving South American crop outlook continue to weigh on the market.

CBOT is trading near the upper end of the range, with rallies facing consistent selling pressure. Soymeal is clearly the weakest leg of the complex due to oversupply and soft feed demand.

SBO remains structurally stronger than beans and meal, supported by biodiesel mandates and energy prices. However, upside is capped by the overall bearish tone of the soy market. Overall, the soy complex is mixed, as beans and meal are bearish to neutral, while oil is relatively firm yet struggling to break higher independently.

India’s domestic soy oil market has turned bullish on strong demand and slow arrivals. February imports are sluggish, with holiday related demand lending support. Upside appears limited, but the firm trend may persist until mid-February.

Argentina’s soyoil FOB spot and forward prices remain stable, trading at a negative basis to CBOT, which signals comfortable supply and no export tightness.

🌾 Rapeseed & Canola

Canadian canola (ICE) remains in a clear downtrend, with a ~ CAD 60/MT drop across Jan–May within one month. Rebounds are weak and rallies are quickly sold. A flat curve with no backwardation indicates no supply tightness. This creates a bearish backdrop for RSO/CNO, with buyers leaning on ICE pricing.

Global rapeseed prices remain under pressure, with limited upside across seed, oil, and meal.

Strong harvests in the EU, Russia, and Australia are keeping global supply ample. Rapeseed stocks are comfortable to elevated, with no visible deficit expected in 2025/26. Export demand is constrained, while crushing margins remain under pressure, especially for oil.

🌴 Palm Oil & Olein

The palm oil market trend remains weak to sideways. KLC fell around 2.35% last week, with the market trading near support.

Malaysian palm oil stocks are expected to rise about 4.7% to roughly 2.97 MMT, near a seven-year high. Fundamentals are mixed: production is down around 9% and exports have edged slightly higher, while high stocks continue to dominate sentiment.

The market remains in a wait-and-see mode ahead of MPOB and USDA data. Downside appears limited near support, with short-term dips likely but viewed as buying opportunities.

🌍 Geopolitics & Macro View

US special operations have shifted focus toward Venezuela, but oil and biodiesel markets have yet to react. Near–term, there is no clear bullish signal.

Meanwhile, ongoing tensions involving UAE–Saudi interests continue to elevate logistics and insurance risks in the region.

Continued currency devaluation in Iran is likely to weigh on imports in the long–term.

Potential tariff pressure under Trump could further weaken India’s rupee (already around 93/USD), negatively impacting edible oil imports.

And in Ukraine, the situation remains challenging, with Odessa exports sharply reduced, which adds further pressure on logistics, trade flows, and pricing.

🌐 Summary

The veg oil complex is holding mainly on soybean oil strength. Palm oil and soymeal remain under pressure, while soybeans and soyoil provide key support. Overall sentiment remains nervous, with limited upside but no sharp downside for oils.

Thank you for your attention, and I am wishing all Orthodox followers a happy Christmas 🎄