Corn oil prices have increased by $60-130 per metric ton compared to early June levels, driven by geopolitical tensions in the Middle East and their ripple effects across global vegetable oil markets.
The price movement follows a pattern seen in related commodities, with soybean oil futures in Chicago experiencing similar upward pressure after oil prices spiked during escalating tensions between Iran and Israel in recent weeks.
Market activity initially became subdued during the early days of the conflict, as both buyers and sellers temporarily stepped back from trading before resuming normal operations. This cautious approach reflects the interconnected nature of global commodity markets and their sensitivity to geopolitical developments.
Strong corn production supports underlying supply
Despite price increases in corn oil, the underlying corn supply picture remains robust across major producing regions. Brazil’s corn crop is progressing well, with positive outcomes reported across the country.
The first crop, or summer corn, is ahead of schedule with 89% of the planted area already harvested according to Conab’s (National Supply Company) June monthly report. Production estimates have increased 1% compared to the previous month, bringing Brazil’s total projected output to 128 million metric tons.
In the United States, the latest USDA report showed ending stocks for the 2025/26 marketing year were revised down from 45.72 million to 44.45 million metric tons. However, this adjustment was already anticipated by market participants and did not create additional price pressure.
Global corn ending stocks for 2025/26 were also reduced from 278 million to 275 million metric tons. Despite lower projected inventories, global corn production for 2025/26 is expected to reach a record 1.265 billion metric tons, with the United States leading at a forecasted 401.8 million metric tons.
Argentina maintains production outlook despite harvest delays
Argentina’s 2024/25 corn season production estimate remains unchanged at 48.5 million metric tons. Currently, 52% of the planted area has been harvested, representing a 3% delay compared to the same period last year.
Market participants are closely watching the progress of the late-planted corn harvest in Córdoba province. While full-scale harvest operations continue, projections remain stable with a national average yield of 6.92 metric tons per hectare across a total planted area of 8.3 million hectares.
Regional trading patterns shift amid supply chain disruptions
The geopolitical situation has influenced regional trading patterns, with Argentina and Brazil positioning themselves to supply volume toward the end of Q3 2025. European suppliers have limited their forward offers to crude degummed corn oil through August 2025.
The United States has focused primarily on domestic distribution of its degummed corn oil, with local buyers paying premiums of up to $300 per metric ton above international market prices. This domestic premium reflects strong local demand and the competitive positioning of US corn oil in the domestic market.
In Asia, China continues to purchase refined corn oil on a spot basis, with buying patterns influenced by rising ocean freight costs. The increase in shipping expenses has added another layer of complexity to international corn oil trade flows.
Shipping disruptions add to market pressures
Container carriers have rerouted several shipping lanes in response to regional security concerns, with some tankers choosing to avoid certain areas altogether to mitigate higher security risks. These logistics adjustments have contributed to the overall increase in corn oil offers and pricing.
The rerouting of shipping lanes represents an additional cost factor that market participants must navigate, particularly for long-distance trade routes between major producing and consuming regions.
This analysis covers key developments from Vesper’s comprehensive corn oil market intelligence. Access the full market analysis here: https://app.vespertool.com/market-analysis/2165