Soyoil Prices Decline Amid Weaker Crude Oil and Increased Supply from South America

Mumbai, 22 June (Commoditiescontrol):The Chicago Board of Trade (CBOT) July soy oil finished lower on Friday, impacted by spread trading and weaker crude oil prices. The July soy oil contract closed at 43.94 cents per pound, down 0.03 cents.

Meanwhile, soybean futures rose, driven by weather forecasts that raised concerns in some regions while alleviating heat fears in others. The CBOT July soybeans ended 5-1/4 cents higher at $11.60-1/2 a bushel. Additionally, July soymeal futures saw a significant increase, closing $4.20 higher at $361.80 per short ton.

According to trade sources, funds were active in the market, being net sellers of 3,000 soy oil contracts, while net buyers of 3,500 soymeal contracts and 3,000 soybean contracts. The USDA reported net export sales of old-crop soybeans for the week ending June 13 at 556,500 metric tons, aligning with analyst estimates ranging from 375,000 to 850,000 tons.

ICE canola futures ended higher on Friday despite a recent rally in soybean futures, mainly due to concerns over rainy weather in the Canadian Prairies. July canola settled up $6.70 at $606.10 per metric ton, with the most-active November canola contract rising $4.40 to $622.50 a ton.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange closed at 3,899 ringgit ($827.81) per metric ton, marking a 1.52% decrease and a 1.19% weekly decline.

In China, Dalian's most-active soy oil contract dropped by 0.99%, while the palm oil contract slid 0.78%.

Euronext rapeseed futures also faced declines, with the most active July futures contracts dropping by 1.50 euros per metric ton to 462 euros per metric ton.

The soy oil price may continue to face downward pressure due to increased supply from Argentina and Brazil. A strong dollar enhances realization for Argentine and Brazilian exporters in local currency, leading to increased supplies of soybean and soy products from these origins. Furthermore, the U.S. decision to allow the import of used cooking oil from Brazil for biofuel feedstock is expected to impact soy oil demand in biofuel production. These factors are likely to keep soy oil prices under pressure in the near term.

(By Commoditiescontrol Bureau; +91-9820130172)