Arg. soyoil prices crash on trade washouts, Black Sea pressure

Argentina’s soyoil prices posted their largest daily loss in five months on news that its largest customer – India – had washed out several trades last week and mounting pressure from the upcoming bumper Black Sea sunseed crop.

Spot cargoes of the soft oil – of which Argentina is the world’s largest exporter – shed $20.50/mt in a single session on Tuesday to reach $716.75/mt FOB Up River, its lowest price since late July.

The move comes less than two weeks after the hub reached a seven-month high.

“Argentine soyoil prices slumped due to demand reduction; India last week washed out 60,000 mt. Instead importers bought soybean oil from Turkey, Russia and Egypt,” Anilkumar Bagani, research head at Mumbai-based vegetable oil broker Sunvin Group, told Agricensus.

Cargoes for September shipment were initially offered at 3.00 ct/lb over September CBOT futures in Tuesday’s session, to trade down at 2.50 ct/lb over and 2.10 ct/lb over, each for 3,000 mt, and to settle at 1.90 ct/lb over as buyers held back.

The news was echoed by an Argentina-based soyoil broker who said that India cancelled two 30,000 mt vessels for September shipment as Argentine prices were undercut by origins closer to India.

“Turkey, Russia and even Egypt were selling soyoil to India at these prices,” the broker said, adding that a price correction was due, given the recent weaker global vegoil complex.

It meant that “Indian demand is absent from the market after the wash out,” a second Argentina-based broker added.

Black Sea pressure

Prices of Ukrainian sunoil, which competes with Argentine soyoil into India, have been falling as the Black Sea’s sunseed harvest approaches, improving the supply prospects after a tight end to the season.

Ukraine is set to harvest its sixth straight bumper crop later this month despite the current dry weather concerns, which has sent new crop sunoil prices down by over $30/mt since the start of this month to around $767/mt FOB Chornomorsk for October loading.

That, in turn, has pulled prices for September cargoes in the Black Sea lower.

“Also consider the fact that the Black Sea inverse is starting to collapse between September and October-November,” the first Argentina broker said, adding that this is putting pressure on all soft oils.