Almost everything in the vegetable oil complex is pointing up, and the drivers are stacking on top of each other.
Energy sets the tone
Start with energy. Brent crude is trading near $88.5 a barrel, up from $84.8 a week earlier, on renewed US-Iran hostilities. Iran’s Revolutionary Guards say two tankers are immobilized in the Strait of Hormuz, and shipping trackers confirm fewer vessels are passing through. Rising Brent and firm rival oils lent support right across the complex.
Palm tracks Indonesia’s export overhaul
Palm oil firmed with the rest. BMD crude palm oil rose to $1,118 a tonne from $1,096, tracking Brent and rival oils. The bigger watch item is Indonesia: state company Danantara will begin export activities on September 1 as a precursor to the Phase 2 export system expected to take full effect in January. Indonesian May output slipped from April, but the January to May total still ran well ahead of last year, keeping first-half supply strong.
Soybean oil catches a tariff bid
Soybean oil had one of the clearer catalysts. CBOT crude soybean oil climbed to 74.68 cents from 72.82, helped by firm Brent, strong NOPA crush and, most of all, tariffs. The US finalized a 25% tariff on a broad range of Brazilian imports effective July 22, and tallow was not excluded. With Brazil supplying 400,000 tonnes of tallow to the US last year, closing that arbitrage throws support behind domestic soybean oil. NOPA also reported June soyoil stocks at an eight-month low.
Rapeseed leads on Black Sea risk
Rapeseed oil was the standout. MATIF rapeseed hit a multi-year high of EUR 557 a tonne, up from EUR 528, as Black Sea logistics disruptions, high grain prices and bullish energy erased any harvest pressure. Ukraine’s harvest is running behind last year’s pace, and with ports under attack, some traders have stopped buying and are hunting alternative routes. Sunflower oil is caught in the same crossfire, rising to $1,495 a tonne FOB even as next season’s crop looks reasonable.
Coconut oil and palm kernel oil are firm on the same tide, and olive oil is the quiet exception, easing in Spain as soft demand outweighs summer weather risk ahead of the new crop.
The one caution
The one caution running through Vesper’s outlook: much of this rests on geopolitics. If the Middle East and Black Sea cool, some of the premium comes back out.
