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CBOT Soy Oil Prices Witness Sharp Decline

8 Jun 2024 10:17 am
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Mumbai, 8 Jun (Commoditiescontrol): Chicago Board of Trade (CBOT) soy oil prices experienced a significant drop on Friday, influenced by losses across the soy complex anticipation roboust crop . The National Oilseed Processors Association (NOPA) revised upward the crush numbers for April, leading to higher soy oil stocks in the U.S. Additionally, funds continued to add short positions in soy oil, further pressuring prices. The most active CBOT July soy oil contract fell by 0.72 cents, closing at 43.63 cents per pound. Similarly, July soybean futures dropped by 20-3/4 cents, settling at $11.79 1/2 per bushel, while July soymeal decreased by $2.10 to finish at $360.7 per short ton.

The ICE Futures canola market also declined on Friday, reversing much of Thursday's gains due to speculative selling driven by chart-based analysis. July canola futures, which had surged 3.7% the previous day, fell by $9.70 to $630.10 per metric ton. Favorable crop weather in Canada further limited the rally, with new-crop November canola dropping $11.20 to close at $649.50 per ton. Euronext rapeseed futures mirrored the downward trend, with the most active August contract declining by €9.50 per metric ton to €465 per metric ton.

Contrarily, Malaysian palm oil futures rose for a second consecutive day on Friday, driven by stronger crude oil prices. Despite this, the commodity recorded a weekly loss due to weak demand and rising supplies. The benchmark August contract on the Bursa Malaysia Derivatives Exchange closed 0.4% higher at 3,976 ringgit ($848.12) per metric ton but was down over 2% for the week.

The Oilseed Processing Association NOPA announced corrections for April crush numbers, revising them upward to 169.436 million bushels from 166.034 million. Consequently, NOPA member oil stocks increased to 1.832 billion pounds from the previous 1.755 billion.

The Commodity Futures Trading Commission (CFTC) Commitment of Traders data for the week ending June 4 indicated that managed money speculative funds increased their net short positions in soybean oil by 15,845 contracts, bringing the total to 57,690 contracts (futures and options combined).

Argentina's oilseed union SOEA announced on Friday that it will commence a strike to protest a proposed labor reform supported by President Javier Milei. The strike will begin once the bill reaches the Senate floor for debate, which is scheduled for June 12.

Soy oil remains under pressure despite supply disruptions in Brazil and Argentina. Brazil's recent tightening of rules for using credits from the federal PIS-Cofins taxes failed to support soy oil prices. Looking ahead, soy oil prices are expected to remain under pressure due to below-expectation use of soy oil as biodiesel feedstock in the U.S. and the anticipated increase in global supplies of soy oil and other vegetable oils. This outlook is reinforced by managed money increasing their short positions in soy oil futures.

(By Commoditiescontrol Bureau: 09820130172)

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