Futures for palm and soybean oil have increased by 8.5-10% over two sessions, following the rise in soybean prices.

The decrease in the estimated soybean planting areas in the US has shocked the market and led to an 8.5% increase in palm oil prices and a 10% increase in soybean prices over the past two sessions.

September futures for palm oil on the Bursa Malaysia Exchange rose by 5.1% to a three-month high of 3,985 ringgit/tonne or $854/tonne (+8.5% over two sessions) in response to Friday’s rise in soybean and soybean oil prices on the Chicago Exchange.

Even the data from surveying company Intertek Testing Services, showing a 6.9% decline in palm oil exports from Malaysia in June, did not restrain speculative jumps.

On the Chicago Exchange, July futures have seen an increase:

• Soybean oil: up 10% to $1,400/tonne (+9.7% in a week, +29% in a month).
• Soybean: up 5.4% to $574/tonne (+2.8%, +15.7%).

It is worth noting that soybean oil prices have increased more significantly due to soybean stocks in the US being 17% lower than last year as of June 1. As a result, processors have started importing soybeans from Brazil to utilize their capacity and reduce production costs.

On the Dalian Commodity Exchange in China, soybean oil contracts rose by 6%, while palm oil rose by 4.9%.

The rapid increase in soybean and palm oil prices has also supported sunflower oil prices, which rose by 1.7% to $895/tonne for buyer delivery, adding 7% in price over the week.

Processors have reduced sunflower oil sales in anticipation of further price increases for vegetable oils. However, the significant supply of rapeseed and sunflower oil in the EU does not allow for a substantial increase in demand from European buyers, while the blockage of Black Sea ports prevents the delivery of Ukrainian sunflower oil to India and China.