Mumbai, 05 Dec (Commoditiescontrol): CBOT soy oil futures fell sharply on Wednesday, driven by improving crop conditions in South America and persistent uncertainty surrounding U.S. biofuel policies, particularly delays in clarifying the implementation of the 45Z tax credit. The most active soy oil contract dropped 72 points to settle at $41.42 per pound, reflecting a 1.23% decline for the day. Losses during the session ranged from 72 to 77 points, underscoring bearish sentiment across the soy oil complex.
The decline in CBOT soy oil extended to global vegetable oil markets. Weakness in Malaysian crude palm oil (CPO) and Dalian soyoil futures further pressured prices. Malaysian CPO futures fell 0.75% to 5,037 ringgit ($1,148.17) per metric ton, weighed down by a stronger ringgit and subdued November export estimates. Dalian’s most active soyoil contract slipped 0.25%, even as palm oil futures on the exchange rose modestly by 0.72%.
India’s edible oil import trends added another dimension to the market dynamics. Imports surged in November, reaching a four-month high as refiners restocked inventories of palm oil, soyoil, and sunflower oil following robust festival season demand. However, with the restocking wave largely complete, near-term demand is expected to slow. Additionally, Indian soyoil demand may remain muted amid softening global sunflower oil prices.
South America’s favorable crop conditions continue to exert downward pressure on prices. Improved weather and strong planting progress in Brazil and Argentina are boosting production outlooks, heightening concerns over a potential oversupply in 2024. This development is intensifying global competition, further weighing on CBOT soy oil futures.
Market sentiment remains bearish, with soy oil prices expected to stay under pressure due to favorable South American crop conditions and unresolved U.S. biofuel policy uncertainties.
(By Commoditiescontrol Bureau: 09820130172)
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