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CBOT Soy Oil Prices Continue to Rally Amidst Supply Disruptions in Brazil and Argentina

23 May 2024 10:04 am
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Mumbai, 23 May (Commoditiescontrol): Soy oil prices continued their upward trajectory, bolstered by ongoing supply disruptions in key exporting countries, Brazil and Argentina. A significant indicator of this shift is the recent flip from a discount to a premium for these two origins, a phenomenon not seen in three years. This development has prompted short-covering by managed money, contributing to the price increase.

CBOT July soyoil closed with minor gains, ending at 45.88 cents per pound. While near-month contracts saw slight increases, far-month contracts experienced losses. July soybean futures rose 10 cents to $12.46-1/4 per bushel, and July soymeal closed $5.90 higher at $378.20 per short ton.

Funds demonstrated a buying trend, acquiring 2,500 contracts of soyoil, 4,000 contracts of soybean, and 2,750 contracts of soymeal.

ICE canola futures also witnessed a slight increase, with the most-active July contract settling at $665.60 per metric ton. This rise was mainly due to technical selling offsetting upward pressure from higher U.S. soybean futures.

Malaysian palm oil futures trading remained closed due to a local holiday.

Meanwhile, Euronext rapeseed futures closed higher, with the most active August futures increasing by Euro 8.75 to 488 euro/Mt.

The current surge in soy oil prices is primarily attributed to short-covering triggered by short-term supply issues in Argentina and Brazil. However, experts caution that as the supply situation improves in these regions and palm oil supplies increase, a sharp fall in soy oil prices could be on the horizon.

(By Commoditiescontrol Bureau; +91-9820130172)

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