Kang from StoneX says last week’s vegetable-oil selloff was mainly a macro move triggered by crude weakness after US-Iran headlines, with palm oil hit hardest and soybean oil comparatively resilient. Palm looks pressured by higher Malaysian stocks and softer demand, while soybean oil remains supported by biofuel demand and tight nearby supply.
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Kang, speaking for StoneX’s Agricultural Commodities team in Singapore, framed the week in vegetable oils as a two-part story: palm oil was weakened by macro-driven liquidation and confirming bearish inventory data, while soybean oil stayed firmer because of policy-linked biofuel demand. He emphasized that the initial catalyst was not fundamental palm weakness but crude oil selling off after headlines about a possible US-Iran deal and a reopening of the Strait of Hormuz, which dragged the whole vegetable-oil complex lower. For palm oil, he said the August contract failed to hold above the 4,590–4,600 area and then closed lower for the week. He interpreted the pattern as long liquidation rather than new short selling because volume rose while open interest fell. …
Near term, palm oil looks soft and vulnerable to further liquidation if crude stays weak or exports disappoint, while soybean oil should remain relatively supported by biofuel demand and tight nearby supply.
Over the next few weeks to months, palm likely stays capped unless demand improves enough to absorb inventories; soybean oil’s base case is continued firmness as mandate-driven consumption keeps the U.S. balance tight.
Structurally, the transcript argues that palm oil’s biggest durable upside risk is weather, especially El Niño, while soybean oil’s regime is increasingly defined by biofuel policy rather than pure energy correlation.
Palm oil fell last week mainly because macro factors, especially crude oil weakness after US-Iran deal and Strait of Hormuz headlines, triggered broad selling.
The speaker says the move was not initially fundamental and that crude oil's sharp sell-off dragged the whole vegetable oil complex lower.
Soybean oil is structurally supported because biofuel demand remains strong and the market still needs additional feedstock to meet blending mandates.
The speaker argues that soybean oil profitability for biodiesel and renewable diesel producers, plus unmet blending requirements, keeps consumption firm despite weaker energy prices.
The palm oil sell-off was driven by long liquidation rather than the start of a new bearish trend.
The speaker points to rising volume alongside declining open interest as evidence that existing longs were unwinding instead of fresh short positions being established.
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