The past trading week was characterized by a strong impetus from the US Environmental Protection Agency (EPA). It presented surprisingly high biofuel quotas for 2026 and 2027, which were significantly higher than previous targets and market expectations. The increase in blending volumes led to strong price gains on the Chicago Board of Trade (CBoT), particularly for soybeans. In contrast, soybean meal prices came under pressure, as the expected boom in soybean oil could lead to a surplus of the by-product soybean meal.
Geopolitical tensions between Israel and Iran drove up crude oil prices and had an indirect positive effect on the vegetable oil markets. Canola futures in Canada also benefited from this development and continued to rise. The supply situation remains tense, as the new canola harvest is facing very dry conditions. Possible rainfall on the prairies could provide some relief, but the announced volumes are unlikely to provide much relief. The Statistics Canada harvest report, which will be published on June 27, is eagerly awaited.
Rising rapeseed prices were also seen in Europe. On Euronext in Paris, the August contract climbed to €500.25 per tonne. Overall, the oilseed market remains exciting due to regulatory requirements and geopolitical uncertainties.
ZMP Live Expert Opinion
The EPA's surprisingly high biofuel quotas could further support the oilseed market in the long term and increase demand for soybean oil and other vegetable oils. The geopolitical tensions in the Middle East are likely to cause increased volatility in the short term and further increase crude oil prices, which could give vegetable oils an additional boost. Influenced by the new regulatory steps and the tense environment in the Middle East, many bullish factors are currently affecting oilseeds. The outcome of the conflict between Israel and Iran is still uncertain. Sudden events can have a direct impact on the price.
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