COMMODITY OIL TRENDS

Farmer's Report

SOY, CANOLA & PALM OIL Trends - June 24, 2022

SOY OIL

Soybean Oil futures closed lower on Wednesday, compared to Wednesday of the prior week.

Reported market drivers:

  • Fears of a pending recession in the United States continue to prompt a “risk off” mentality in the commodity markets, according to analysts
  • Soybean oil’s share of product value peaked at just over 51% in early May, and has since slid back towards 45% in the spot position, as meal is now the stronger product on increased feed demand
  • Soybean oil basis levels were softer this week, following the lead of recent declines in Argentina. Analysts note that U.S. soybean oil exports have been sluggish over the past few months
  • WTI crude oil futures fell this week, exerting some additional pressure on vegetable oil prices via lower biodiesel margins
  • The U.S. soybean crop is off to a good start, and current 6-to-10-day weather forecasts show mostly favorable conditions for early growth

CANOLA

  • The spot canola seed futures moved lower through Wednesday, with the market following the lead of lower palm and soybean oil prices
  • The canola crop got off to a late start this year, but weather conditions have improved recently in the southern prairies of Canada
  • Canola oil basis offers remained mostly steady this week, as North American supplies remain tight

PALM OIL

  • The palm oil futures were sharply lower through Wednesday, as Indonesia has become an aggressive seller in the global cash market, according to analysts, while demand from India and China has waned in recent weeks
  • Palm oil prices remain at a rather large discount to soybean oil in the global cash market, according to analysts

Mayo & Margarine

  • The soy and palm oil components of mayonnaise and margarine were both lower through Wednesday’s close. Butter prices remained elevated on the spot cash market

The data contained in the Farmer’s Report is provided for informational purposes only, is not tailored to your specific purchasing needs, and is not intended as a substitute for any other publicly-available market data or information. The Farmer’s Report is compiled from the last-received market data provided by the United States Department of Agriculture (USDA) and/or other market sources, and is subject to change without notice. Nothing herein is the opinion of US Foods®. US Foods neither assumes any legal liability nor makes any warranty or guaranty, either express or implied, regarding the completeness, accuracy or usefulness of this information.