Brent crude has climbed to around $87 a barrel today, up from a low of $79 last week, after Iran and the United States traded demands for compensation on Monday, dimming hopes of reopening the Strait of Hormuz. US Strategic Petroleum Reserve inventories dropped to their lowest level since 1983 for the week ending 31 July. That firmer energy backdrop is doing real work across the oils and fats complex this week, and it’s arriving alongside an extreme heatwave across Britain, France, Spain and Central Europe that France’s farm ministry says could cut the country’s 2026 corn crop by 35% year on year, to the lowest level since at least 1980.
Palm oil rebounded to $1,112 a tonne on the Bursa Malaysia Derivatives exchange, up from $1,097 a week earlier, helped by the stronger Brent and by expensive diesel widening harvesting intervals in Malaysia and Indonesia. Growing Malaysian stocks capped further gains: MPOB data show July production up 9.4% and exports up 14.5% month on month.
Soybean oil rose on CBOT to 69.46 cents a pound from 68.69 cents, supported by the same Brent strength and by record US biofuel demand: producers used 1.43 billion pounds of soybean oil in May, up 17% on April, taking soy oil’s share of the low-carbon feedstock pool above 39%.
Rapeseed oil firmed too, with MATIF rapeseed up to €539 a tonne from €524, as low river levels disrupt shipments from Germany, the Balkans and Ukraine via the Danube, tightening the supply picture for the new season. Sunflower oil whipsawed, dipping before rebounding on the strength in rival oils, as unresolved Black Sea logistics keep the market on edge; Russia is preparing rail-shipment subsidies to redirect cargo away from Sea of Azov shipping curbs.
Coconut and palm kernel oil moved the other way, both easing week on week as the coconut market softened further, even as the strengthening El Niño is becoming a bigger factor for supply into 2027. In Spain, an industry cost study found olive oil production costs have risen nearly 57% since 2020, now exceeding market prices across much of the country’s traditional groves, even as the market itself held roughly steady on the week.
This news article is part of a broader Vesper market analysis on the global oils and fats market. For the full market analysis, visit: https://app.vespertool.com/market-analysis/3316
