Vegetable oil markets steadied this week, caught between a rebound in Brent crude and a long list of conflicting signals. Brent’s August contract fell to a few-week low of $91 a barrel on May 29, then recovered to around $95 after reports that Iran had suspended talks with Washington following Israeli operations in Lebanon. That swing carried across the oils complex.
Palm oil tracked crude higher, with the Bursa Malaysia benchmark edging up to $1,128/mt. Malaysia’s B15 biodiesel mandate took effect on June 1, up from. B10, a step expected to pull an extra 334,000 mt of palm oil into domestic use. Exports, though, ran below April’s pace on both Malaysian and Indonesian shipments.
Soybean oil set fresh highs, with the CBOT July contract reaching 79.09 US cents/lb. A tight US biofuel feedstock market did much of the work: D4 blending credits climbed to a record $2.26 each, and Fastmarkets describes the market as structurally short of the feedstock its renewable fuel capacity now requires. RIN generation in April again fell well short of the monthly volume needed to meet the EPA mandate.
Rapeseed oil was steadier, with the MATIF August contract near EUR 529/mt, even as the European Commission nudged its EU crop forecast up to 20.9 mmt. Sunflower oil firmed only slightly, with stronger supply from Argentina and the Black Sea capping gains.
The longer shadow is weather. Forecasters are hardening their view on a strong El Niño in 2026, a risk for Australian and Canadian canola and for palm and coconut crops across Southeast Asia. ABARES already sees Australian canola output down about 20% next season. For now, coconut oil and palm kernel oil eased on improving copra supply, and olive oil slipped again on a comfortable Spanish outlook.
