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May 13, 2022
Discussions are being held about a possible cut in biodiesel blending in Germany. Nothing has been decided just yet, but the fact that biodiesel is the main outlet for rapeseed is bringing slight pressure to bear on rapeseed prices. With regard to vegetable oils, palm oil stocks in Malaysia are up and traders are expecting Indonesia's embargo on palm oil exports to be short-lived. The soya crush industry is working flat out, but lockdown in China is causing concern about Asian demand. All these factors are bringing a slight pressure to bear on oilseed prices, but the tightness for supply is such that the potential for a decline seems particularly limited.
The cereal market is still extremely tight, given the concerns about production in the importing and exporting countries. Stock levels do not allow for any major production incidents. There are, however, increasing concerns for many exporting countries. Production estimates are gradually falling. With low stocks and concerns for all three cereals, no substitution seems possible, thus making the market extremely volatile. Given the risk of a slowdown in global growth, only a major economic factor would give the markets the potential to ease.