As long as the activity in most markets for vegetable oils is very limited, news and sentiment are still leading the markets more than fundamentals. This means that production estimates such as given by the USDA last week are causing a slight change in sentiment and therefore market direction. Globally they are projecting an 8% increase in oilseed production, but before we see the actual production numbers at the time of harvest, there is so much that can happen in the meantime.

Last year and early this year have shown that anything ranging from weather issues, and problems with worker availability, to lockdowns, are able to reduce both the quality and the quantity of vegetable oils globally. In other extreme cases, political choices such as the Russian invasion of Ukraine and the Indonesian export ban could also reduce the availability of oils even after they have been harvested. Similar to what we have been seeing in the last months so far, anything can happen in these unprecedented times.