Russia forced to resow wheat
After quotations rose sharply at the start of the week improved growing conditions in the Midwest of the USA along with more encouraging weather forecasts in Russia brought the market back on a downward turn. Analyst SovEcon has, however, further reduced the crop forecast for Russia by 3.9 million mt to 85.7 million mt as an area spanning 500,000 ha needs to be resown after frost inflicted heavy damages. The USDA’s May report reckons with 88 million mt. Ukraine will also only harvest 21 million mt, which is 2 million mt less than...
This is evidenced by data in the USDA report for May.
Thus, the sunseed harvest is projected at 14.7 million tons, which is 200 thousand tons more than in 2023/24 MY. Exports of oilseeds, according to experts, will amount to 260 thousand tons (-65 thousand tons).
According to experts, sunflower oil in Ukraine in 2024/25 MY will be produced 6.15 million tons (-170 thousand tons), of which 5.72 million tons (-80 thousand tons) will be exported.
The production of meal will be 5.9 million tons (-165 thousand tons), and exports are forecast at 4.5 million tons (-200 thousand tons).
“Sunflower processing in Ukraine will be slightly down year-on-year, but Ukraine is expected to remain the world’s largest exporter of both sunflower meal and oil, accounting for almost half of global exports,” the report said.
Crude palm oil (CRO) is offered for delivery in June at a price of $920/t CIF (including the cost of insurance and freight), soybean oil at $920/t, and sunflower oil at $945/t, Reuters reported recently.
India buys palm oil mainly from Indonesia, Malaysia and Thailand, and soybean and sunflower oil - from Argentina, Brazil, Ukraine and the Russian Federation.
August rapeseed futures on the MATIF exchange in Paris rose to €484.75/t on Monday (the highest level since 07/24/2023), but then fell 2% to €475/t, or $517/t, as traders began to record profits against the background of a 5.7% increase in prices in May and an appreciation of the euro against the dollar.
In the EU, growth in vegetable oil prices has stalled, and increased supply of soybean oil is putting pressure on prices.
According to the USDA forecast, in 2024/25 MR the global production of rapeseed will decrease compared to the previous season from 88.39 to 88.34 million tons, as the harvest in the EU will decrease to 19 (20) million tons, Ukraine - to 3.7 (4 ,4) million tons and India - up to 15.1 (15.5) million tons will be partially compensated by its increase in harvest in Canada to 19.6 (18.8) million tons, China - up to 15.6 (15.4) million tons and Australia - up to 6.5 (5.7) million tons.
Deliveries, as noted, increased in the direction of key importers. For example, Uzbekistan has almost doubled imports – from 63.91 thousand tons to 112.4 thousand tons.
China, which is in the second position of the rating, increased purchases to 79.16 thousand tons from 58.49 thousand tons.
Tajikistan closes the top 3. In the first 7 months of 2023/24 MY in this direction shipped 40.53 thousand tons of products against 24 thousand tons last season.
Also during this period, Kazakhstan managed to double the supply of sunflower oil to Afghanistan – up to 12.77 thousand tons.
EU crop to increase by 9%
In recent days, the US Department of Agriculture has published its current estimates for the global sunflower seed crop in 2024/2025. At 55.428 million mt, production would be a good 1% higher than in the previous year. The forecasts for Russia (-0.6% to 17 million mt) and Ukraine (+1.4% to 14.7 million mt) are expected to remain almost stable. In Argentina (-7% to 38 million mt), China (-6% to 1.6 million mt) and the USA (-28% to 736,000 mt), however, the crop is expected to be lower, while the outlook for the EU (+9% to 10.9 million mt)...
According to experts, the decline in exports of Brazilian soybean oil will be due to increased demand in the domestic market from the biofuel sector.
In addition, experts fear a noticeable decline in the soybean crop in Rio Grande do Sul – the damage may amount to 2 to 3 million tons.
Already now heavy rains in the state lead to difficulties in logistics, the situation with the delivery of raw materials to ports remains tense.
“Forecasters are predicting increased rainfall over the next seven days, which could cause further damage to soybean crops,” analysts told Commodity Insights.
According to the forecast, the world production of vegetable oils in 2024/25 FY will grow to 228.28 million tons (223.8 million tons in 2023/24 FY, 218.33 million tons in 2022/23 FY and 208.55 million tons in 2021/ 22 MR), in particular soybean - 65.4 (62.4; 58.6 and 60) million tons, palm oil - 80 (79.3; 78 and 73) million tons, while the production of sunflower and rapeseed oil will remain at the level of 21 ,7 and 34 million tons, respectively.
The consumption of oils in the food sector will grow more than in industry, as the development of electric vehicles gradually reduces the need for biodiesel. However, industrial consumption will still exceed food consumption.
The world consumption of vegetable oils in 2024/25 MR will grow to 224.9 (218.8; 211.2 and 202.8) million tons, in particular soybean oil – to 64.5 (61.4; 58.9 and 59.8) million tons, palm – up to 79 (77.44, 74.2 and 69.4) million tons, rape – up to 34.36 (33.5, 32.7 and 30.2) million tons, sunflower – up to 34, 36 (33.5; 32.7 and 30.2) million tons, while sunflower will decrease to 20.4 (20.7; 19.5 and 17.55) million tons. The largest global consumers - China and India will continue to increase use of vegetable oils.