Global oilseed markets displayed contrasting dynamics this week as rapeseed supply forecasts increased across major producing regions while sunflower markets face tightening fundamentals due to crop shortfalls and harvest delays.

Palm oil rebounds on Malaysian production concerns

BMD crude palm oil strengthened $20/mt to $1,042/mt as markets adjusted expectations for Malaysian production growth. August production is estimated at 1.81-1.85 million metric tons – above the multi-year average but below last year’s 1.9 mmt level.

Malaysian stocks are estimated at around 2.2 million metric tons versus 2.11 mmt in July, representing a record level for August. However, this is partially offset by lower Indonesian stocks due to strong domestic and export demand.

Early August shipments from Malaysia accelerated with 290,000 mt shipped in the first five days compared to 223,000 mt in the same period previously. Indonesian August shipments remained in line with July’s near-record 2.6 million metric tons.

Soybean oil declines on China demand concerns

CBOT soybean oil dropped $28/mt to $1,118/mt as markets grow increasingly nervous about the absence of Chinese purchases of US soybeans ahead of the approaching harvest. The futures market has moved into contango, with deferred positions trading at a premium to nearby contracts.

Market participants suggest China will be comfortable purchasing solely from Latin America and Russia until the end of 2025, potentially leading to a significant US stock build-up as sales to other destinations cannot compensate for lost Chinese volumes.

Despite the trade tensions, China bought 12.28 million metric tons of soybeans in August – up 1.2% from last year and marking the highest ever level for August, with most shipments coming from Brazil.

Rapeseed complex faces supply abundance

MATIF rapeseed declined EUR 7/mt to EUR 460/mt, touching the lowest point in several months as the market moved into increasingly bearish territory. Crude rapeseed oil FOB Dutch Mill traded EUR 8-10/mt lower with nearby positions maintaining a premium over deferred contracts.

The bearish sentiment reflects substantial upward supply revisions across multiple regions:

  • Australian crop forecast increased by almost 700,000 mt to 6.738 mmt
  • Canadian crop expected to be 1-2 mmt above last year’s levels
  • EU crop previously revised up by 3 million metric tons

China-Canada trade tensions persist with China extending its investigation into Canadian canola until March, though some view this as providing more time for potential negotiations.

Sunflower markets tighten despite rival oil pressure

Crude sunflower oil prices declined $10-20/mt under pressure from weaker rival oils, but remain at relatively high levels due to crop issues across Ukraine, Europe, and Turkey.

Ukrainian sunflower crop forecasts stabilized at around 13.56 million metric tons versus 15.5 mmt expected several months ago and 12.8 mmt last year. Harvesting progress remains extremely slow with only 208,000 mt harvested compared to 1.4 mmt in the same period last year.

EU sunflower crop expectations were reduced to around 9 million metric tons from over 10 mmt projected 1-2 months ago, with harvesting also progressing slowly. Russian production is expected to reach 19+ million metric tons versus 17.4 mmt last season, helping offset losses in Ukraine and Europe.

Coconut oil recovers to expected levels

EXW Manila crude coconut oil increased to nearly $2,600/mt from $2,450/mt as prices recovered to levels anticipated by market participants. CIF Rotterdam moved sideways with prices quoted almost identically to Manila levels.

The Philippine government is seeking US exemption from the 19% tariff on coconut products while exploring new export markets. Philippine coconut oil exports in August plummeted to 37,000 mt from 105,000 mt last year due to demand rationing.

Access the full Week 37 Oils and Fats Market Analysis on the Vesper Platform here: https://app.vespertool.com/market-analysis/2259