July 2, 2025 – Week 27 Market Overview

Global vegetable oil markets experienced significant downward pressure this week as falling Brent crude oil prices and higher-than-expected supply forecasts weighed on trader sentiment across multiple commodities.

Key market movements this week

Brent crude oil declined sharply from $71.68 to $67.61 per barrel, driving down the entire vegetable oil complex as the Israel-Iran ceasefire appears to be holding and OPEC+ signals potential production increases ahead.

Palm oil prices retreated with crude palm oil (BMD) dropping to MYR 3,979/mt from MYR 4,119/mt week-over-week. Despite the price decline, export data showed encouraging signs with Malaysian shipments increasing 4.66% in June and Indonesian exports jumping 13% in the first 25 days compared to May.

Soybean complex under pressure from stock surprises

The soy complex faced headwinds after the quarterly U.S. grain stocks report revealed June 1 soybean stocks at 1.008 billion bushels, 4% higher than last year and above analyst expectations of 980 million bushels. CBOT soybean oil declined to $1,158/mt from $1,174/mt.

However, Brazil’s biodiesel mandate increase to 15% starting August 1 provides a bullish counterbalance, potentially requiring an additional 580,357 mt of soybean oil annually to meet production demands.

European rapeseed markets react to production revisions

The rapeseed complex experienced notable volatility as Strategie Grains raised EU production forecasts to 19.2 million metric tons from 18.6 mmt, citing favorable weather conditions in Romania. MATIF rapeseed prices fell to EUR 468/mt from EUR 499/mt.

Canadian canola faced additional pressure after 2024 production was revised upward by more than a million tons, despite farmers planting 21.5 million acres, down 2.5% from the previous year.

Sunflower oil sector shows mixed signals

Russian sunflower planting exceeded expectations with 11.390 million hectares planted, 9% above last year and 105% of planned area. The Russian agency IKAR projects production could reach 18-18.5 mmt versus 16.2 mmt last year.

Meanwhile, Argentina set a new record for sunflower seed crushing in May at 466,000 tons, up from 420,000 tons in April.

Specialty oils show resilience

Coconut oil and palm kernel oil bucked the broader downtrend, with crude coconut oil (EXW Manila) rising to $2,573/mt. Supply concerns persist across major producing regions, with Sri Lanka forecasting a 250 million nut decline in the first half of 2025.

Olive oil prices strengthened by EUR 50/mt to EUR 2,900/mt as Argentina forecasts a 21% production drop to 27,500 tons, while Spain faces challenges from the hottest June in a decade affecting fruit set.

Market outlook and analysis

Vesper’s proprietary machine learning models and comprehensive market analysis suggest varied trajectories for different oil sectors in the coming months. Short-term price movements will likely be influenced by seasonal demand patterns, harvest pressures, and ongoing geopolitical developments affecting crude oil markets.

For detailed price forecasts, supply-demand analysis, and sector-specific insights across palm oil, soybean oil, rapeseed, sunflower oil, and specialty oils, access the complete Vesper market analysis on our platform: https://app.vespertool.com/market-analysis/2054