Misty.
Since Donald Trump came to power at the beginning of the year, many market analysts sometimes seem to have been sipping too much Irish Mist, so divergent and foggy are their reactions and predictions given without much conviction. Of course, trade wars disrupted market expectations and economic outlooks. So many forecasts, given "subject to", often also take into account the possibility of a black swan event.
The unpredictability of governments, whether within the EU, the US, or Asia, particularly regarding biofuel policies, also contributes to this blurry situation, keeping everybody in suspense.
It looks like the EUDR will be postponed for another year but certainty will only come when the new law is published before end December so the decision can be adopted. This situation kept most sellers and buyers, prudently, on the sideline. The uncertainty about a truce in the Russia-Ukraine war is also keeping people mostly in a wait-and-see attitude. And there is always the chance that all this backfires on any counter-notice.
Nevertheless, a recent "FAO Outlook" tells that in the 2025/2026 season, global oils and fats consumption is to grow 2.1% supported by biodiesel policies. And the 271.8Mmt consumption is to exceed the production of 270.5Mmt. This should be quite bullish but today's overall weakness points in the other direction.
Over the past weeks, palm oil prices remained under pressure due to weak demand from India and China and disappointing exports from producing countries. However, the soybean complex consolidated after reaching its highest level in nearly 18 months, before entering a more cautious phase due to a lack of conviction about China's commitment to take off US soybeans in the promised quantities. The question is how long this recovery in US soybeans can last if Brazilian soybean prices, with a new bumper crop in the making, continue to fall.
It has been like trying to read into a foggy crystal ball. And a significant economic fog has been keeping many markets in a state of lethargy.
Markets
Palm oil
According to some sources, Malaysian shipments fell by around 17% in the first 25 days of November, while exports to China declined by nearly 30% in the first ten months of 2025. The weakness of the mineral oil market also weighed on prices. Past weakness also reflects seasonal increases in production and rising stocks. Short term supplies are ample although recently some supply concerns rose on heavy rainfall and floodings in South East Asia.
After the peak production period the seasonal production decline sets in to, bottom out around February, and overall, the palm oil market remains fundamentally strong, with a moderately bullish outlook, supported by strong demand for biofuels in Indonesia and limited production growth forecasts due to, amongst others, aging trees and politics.
China and India oil purchases have been lagging and it is expected that both countries will step up purchases again to replenish stocks
Soybean oil
The soybean complex benefitted from the support of the "China deal," and China bought an additional 10 to 15 shipments of US soybeans last week, before Thanksgiving. However, as more Chinese trade was reported, the market seemed halfhearted, as cumulative purchases are still far from the promised 12Mmt for this season. Brazilian beans remain cheaper, and China apparently has sufficient supplies to bridge the gap between the old and new Brazilian harvests. Non-Chinese buyers may turn to buy cheaper beans in South America. Moreover, Chinese soybean purchases will do little to fundamentally reduce US soybean ending stocks. To maintain present levels in the US, the bulls may need to be fed much more China export business or unfavorable South American weather.
In Argentina excessive and persisting rainfall has delayed plantings to a year-on-year backlog of 9% but only 1% compared to the last five-year average. Last week the Buenos Aires Grains Exchange reported Argentina soybean plantings at 36% of the projected 17.6MHa, complete. For the 2024/2025 season about 18.4Mha were sown which yielded abt. 50.3Mmt.
Despite some weather-related delays, Brazil remains set for another record-breaking crop of 178Mmt in 2026, according to the last Agroconsult estimate, which compares to this year's 172Mmt. Plantings are over 80% complete.
In the US, soybean oil had been trading lower, mainly under pressure from weakness in petroleum prices, while the market continued to assess the impact of expected changes in US biofuel policy. There is still no clarity on the "renewable volume obligation" or on the proposal to impose a 50% penalty on tax credits generated by biofuels made from imported feedstocks. There is a lot of talk of postponing the latter, which may have a global impact on trade flows of animal fats, used cooking oil, rapeseed oil…, but basically would be bearish US soy oil.
Rapeseed oil
Longer term, there are signs of more price pressure: seed ending stocks in EU this season are expected to exceed the five-year average by 1Mmt. In addition, the increase in EU rapeseed acreage for 2026-2027 and favorable weather conditions at the start of the cycle could also weigh on seed prices. There is of course also Canada, Australia and Ukraine… as we operate in a global market.
The outlook for rapeseed oil remains mixed due to ongoing uncertainty surrounding European biofuel policy, particularly with regard to Germany's implementation of the next version of the Renewable Energy Directive the so called RED III. The high prices of sun oil also support rape oil prices.
Sunflower seed oil
More bad news came upon us. Supply in the Black Sea region remains tight. Harvest estimates for Russia, Ukraine, and the EU have been revised downward again. Initially estimated at 61Mmt of sunflower seed, the current estimate is below 57Mmt. Farmers remain reluctant to sell their crops and sun oil premiums over other oils remain significant. The market is still hoping for seed processing to pick up in the coming weeks, meaning more products should become available and sunflower oil prices could become more attractive. Market participants, cautiously, remain sidelining.Some good news came from South America. In Argentina, last week, sunflower plantings only progressed 1.2% week-on-week due to delays caused by excessive rainfall in the southern part of the sunflower acreage. But already 96.3% of the projected 2.7MHa had been planted compared to 2.2Mha in the 2024/2025 season which yielded abt. 5Mmt. Next crop is forecasted at 5.5Mmt abt. 8% over 2025 and 40% over 2024.
Butter
Olive oil
The Mediterranean harvests are in full swing, but it is still too early to forecast the final quality and volumes. However, there are fears that Spain's annual production of pressed olive oil, initially estimated at around 1.5Mmt, will not be reached, with indications of lower yields, this season (some sources cautiously forecast 1.3Mmt vs. 1.4 last season). The alleged reason is the intense summer heat and Portugal has reported losses of up to 30%. In Turkey and Greece, forecasts point to a smaller harvest too, while Italy and Tunisia are still anticipating a more abundant harvest. Spanish producers are reacting cautiously and prices have rebounded sharply, by up to 25%. Although, globally, not (yet) dramatic, the situation makes it more difficult to replenish stocks.
Energy & currency
Amid economic concerns, the market has factored in a potential petroleum oversupply, alongside ongoing talks on a potential peace agreement between Russia and Ukraine. However, after initial optimism, there are few signs of progress in resolving the conflict. Nevertheless, energy prices remained under severe pressure.
It is generally expected that, in the US, the FED will lower policy interest rates in the near future to crank up the economy. In EU the ECB is expected not to change rates. This situation could further weaken the US dollar and strengthen the Euro. A weaker dollar often makes prices of USD priced commodities go up and is bad for EU exports. Imports into EU become less expensive.
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