
Soybean oil touched a three-week low after India's sowing data showed a 2.7% lead over last year and Argentina rain models improved.
Soybean oil futures dropped for a second session on the Chicago Board of Trade on Friday, with the contract touching its lowest level in three weeks. The move came after India's farm ministry reported that soybean sowing had accelerated over the past week, covering 12.4 million hectares through Friday. That is up from 11.1 million hectares a week earlier and 2.7% ahead of the same point in last year's season.
The Indian sowing numbers matter because India imports roughly 55% of its edible oil consumption. A bigger domestic oilseed crop would mean less demand for imported palm and soya oil later this year. Traders said the data raised the possibility that India's 2025-26 harvest could meet a larger share of the country's demand, potentially compressing export premiums for South American and Southeast Asian suppliers.
Separately, weather models over the past 48 hours showed improved chances of rain across Argentina's main soybean-growing regions over the next two weeks. Argentina is the world's top exporter of soybean meal and the third-largest exporter of soybean oil. The country has been in a dry spell since late March, with soil moisture deficits in central and northern growing areas. The weekend rain forecast reduced weather premium priced into the complex.
For traders watching the US market, the USDA's weekly export sales report showed net soybean oil sales of 8,400 tonnes for the week ending June 12, down sharply from 130,200 tonnes the prior week. China was absent from the buyer list for the second consecutive week. The slowdown in Chinese purchases adds to headwinds for a market already facing competition from Argentine and Brazilian cargoes at a discount.
The soybean complex – meal, oil and the underlying bean – has been under pressure since mid-May as the US planting season wraps up with no material weather threat. The USDA's June acreage report, due June 30, is the next scheduled data point that could change the path. Analysts surveyed by Reuters expect soybean planted area at 86.75 million acres, slightly above the USDA's March estimate of 86.51 million acres. A number at or above the high end of the range would reinforce the bearish supply outlook through harvest.
Malaysian palm oil futures, which trade as a substitute for soya oil in many Asian markets, also fell on the week, pressured by the Indian sowing data and a stronger ringgit. The two oils typically trade within a spread of $100-$150 a tonne; that spread has narrowed to about $110, within the range where refiners can switch between them without significant cost penalty.
The near-term risk for longs is that the supply-side story continues to dominate. Sowing progress in India, favourable US weather, and Argentina rain are all pushing in the same direction. A reversal would require a demand-side catalyst – a pickup in Chinese buying, a biodiesel mandate change, or a weather event – none of which is visible as the week closes.
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