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Vegetable oil prices hit multi-year highs

Vegetable oil prices hit multi-year highs

Sunflowers

A mix of production interruptions, recovering food consumption, and an upbeat outlook for biofuel demand have helped push vegetable oil prices to multi-year highs in 2021, including sunflower.

“The strong global vegetable oil prices and the possibility of less acres being planted later this spring are providing positive forward momentum to old and new crop NuSun and high-oleic prices,” noted John Sandbakken, executive director of the National Sunflower Association, writing in the April 26 NSA newsletter.

As of April 26, NuSun prices were listed at $26.50 per hundredweight for delivery in May at the Cargill crush plant in West Fargo, N.D., and $26.15 at the ADM crush plant in Enderlin, N.D., for delivery in May.

Prices for high-oleic sunflower were $27.30 per hundredweight for delivery in May at West Fargo, while prices at Enderlin were listed at $26.90, also for delivery in May.

One of the big concerns for producers in the Northern Plains so far this year is the fact that drought is spreading and intensifying, including in North and South Dakota. But that may open the door of opportunity to look to drought-tolerant sunflower.

“There is still time to adjust your plans to take advantage of the market opportunities that drought-tolerant sunflowers can offer,” noted Sandbakken. “Late-season planted crops like sunflower can perform well and markets will reward that production.”

Another factor playing into the rally in sunflower and vegetable oil prices is the USDA planting intentions report that was released March 31, in which producers indicated they would be planting fewer acres to sunflower in 2021. In fact, producers in seven of the eight major sunflower production states were expecting a decrease in sunflower acreage this year.

“The report showed planting of oil-type acres much lower than expected by the trade. With lower than anticipated acres, diversifying market risk with some oil sunflower acres could be a good option in 2021,” Sandbakken said, adding that seed supplies are still plentiful to add acres this season.

“If you are concerned about the drought impacting yields, crush plants are still offering Act of God contracts for fall delivery,” he continued. “These ‘fail safe’ contracts have become very popular with farmers throughout the production region. It provides an opportunity to ‘lock in’ attractive prices now for fall delivery and removes that all important factor of ‘yield risk’ when uncertain growing conditions exist like this year.”

As of April 26, new crop 2021 NuSun sunflower prices at Cargill in West Fargo were listed at $26.20 cash and $25.80 with an Act of God (AOG) clause. The ADM plant at Enderlin listed the 2021 new crop cash price at $26.25 and with an AOG the price was $25.75.

High-oleic 2021 new crop contracts at Enderlin were listed at $27 cash and $26.50 with an AOG. At West Fargo, new crop high-oleic contracts were listed at $26.95 cash and $26.45 with an AOG clause. Elsewhere in North Dakota, the new crop price was $26.40 at Pingree and $25.60 at Hebron.

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