Soy oil hits two-year high as crude rallies after Iran strikes

2026-03-02 - 09:14

Soybean futures in Chicago surged as much as 3.9% on Monday before paring some gains. (Freepik pic) CHICAGO: Soybean oil jumped to the highest level in more than two years, tracking crude prices higher after strikes by the US and Israel on Iran over the weekend. Futures in Chicago surged as much as 3.9% on Monday before paring some gains, though the most-active contract remains on track to advance for a sixth session. Benchmark palm oil prices in Kuala Lumpur climbed 1.6%. The rally in energy markets supported the move as higher crude prices usually make other fuel sources such as biodiesel more attractive and boost demand for vegetable oils. “It will be like a magnet with crude oil this week following the attacks in Iran,” said Joe Davis, director at brokerage Futures International LLC, referring to soy oil prices. Crude spiked before paring the biggest surge in four years, with the US-Israeli war against Iran plunging the oil market into turmoil, triggering concerns about prolonged disruptions at the Strait of Hormuz. While the Middle East does not buy as much palm oil as India, China and the EU, about a fifth of the tropical oil travels through the Strait of Hormuz, said Nirgunan Tiruchelvam, an analyst at Aletheia Capital. “The escalation in conflict may not directly lead to cancellations of shipments as there are alternative routes, though they would take more time,” he said. “Vessels going to the Middle East are avoiding those routes or asking for expensive freight, which can increase vegetable oil prices for nations of the Gulf Cooperation Council (GCC) and have an impact on trade flows into the region,” said Mayur Toshniwal, president and head of trading at Emami Agrotech Ltd, an Indian vegetable oil processor and biodiesel maker. “The GCC together with Afghanistan and Pakistan imports about 5 million tonnes of vegetable oils a year,” Toshniwal said. “The ongoing war in the region will keep these prices elevated, and trade volumes may be impacted for at least one to two months,” he added. Separately, Beijing said over the weekend it will impose a 5.9% anti-dumping duty on rapeseed imports from Canada from March 1, well below preliminary levels set last year. That followed an announcement by China on Friday that it would drop tariffs on Canadian rapeseed meal after Prime Minister Mark Carney’s visit in January. Prices: Soybean oil May delivery was 2% higher at 63.07 cents a pound as of 1.06pm Singapore time, after posting the biggest gain for a most-active contract since late 2023. Palm for May delivery on Bursa Malaysia Derivatives rose as much as 1.6% to RM4,108/tonnes, before trading at RM4,103 ringgit by the midday break in Kuala Lumpur Soybeans in Chicago were little changed. While wheat and corn were also steady.