Mumbai, 03 Aug (Commoditiescontrol): The CBOT soy oil market continued its downward trajectory, impacted by a sharp drop in crude oil prices and a significant 5.6% year-over-year decrease in soy oil consumption for biodiesel feedstock in May 2024.
December CBOT soy oil futures declined by 0.64 cents, settling at 40.81 cents per pound. In contrast, November soybeans gained 10.75 cents, closing at $10.27 per bushel, while December soymeal increased by $8.40 to reach $324.60 per short ton.
According to trade sources on Friday, funds were net sellers of 6,000 soy oil contracts, while simultaneously being net buyers of 6,000 contracts each in soybeans and soymeal.
ICE canola futures rebounded on Friday, supported by a weaker Canadian dollar, following Thursday’s losses. The Canadian dollar marginally decreased by 0.01% against the U.S. dollar. Upcoming rainfall is expected to relieve stress on approximately half of Canada's canola crop, as forecasted by the Commodity Weather Group.
Malaysian palm oil futures closed higher on Friday, tracking gains in competing oils. However, the stronger ringgit limited further advances. The October contract on the Bursa Malaysia Derivatives Exchange rose by 47 ringgit to 3,917 ringgit per metric ton, though it registered a 0.63% decline for the week, marking its second consecutive weekly drop. A Kuala Lumpur-based trader highlighted that recoveries in Dalian palm olein and Chicago’s soy oil supported the rally, but the strong ringgit capped the upside potential.
Euronext rapeseed futures edged slightly lower, with the most active November contract slipping by €0.25/MT, settling at €472.5/MT.
In May 2024, biofuel producers consumed 1.076 billion pounds of soybean oil, with 597 million pounds utilized for biodiesel and 479 million pounds for renewable diesel production. This represents a decline from the 1.141 billion pounds consumed in May 2023, where biodiesel accounted for 663 million pounds and renewable diesel for 478 million pounds.
The latest CFTC reports indicate that managed money traders significantly increased their short positions in CBOT soy oil during the week ending July 30. They added 29,967 contracts, nearly doubling their net short position to 59,587 contracts from the previous week.
Looking ahead, CBOT soy oil is likely to remain under pressure as the new U.S. crop enters the market next month. Additionally, demand for soy oil as a biodiesel feedstock is expected to remain subdued due to the availability of cheaper alternatives and continued weakness in crude oil prices.
(By Commoditiescontrol Bureau; +91-9820130172)
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