The war between Ukraine and Russia has been a major source of influence in the sunflower market and will continue to be for the foreseeable future.
Not only has the conflict impacted sunflower production in Ukraine, but also Ukraine’s ability to export not just sunflower oil, but other agricultural commodities, as well. Ukraine is a major importer of sunflower oil in the world.
“Traders are keeping an eye on scheduled talks between Ukraine, Russia, and Turkey as officials try to hammer out an extension to the Black Sea Grain Initiative (BSGI) that's keeping agricultural products flowing out of Ukraine,” commented John Sandbakken, executive director of the National Sunflower Association (NSA), writing in NSA’s weekly newsletter on May 8.
“Russia wants the West to remove banking sanctions in exchange for maintaining the BSGI to free up its revenues from fertilizer and grain shipments,” he continued, adding that the agreement will expire on May 18 and “has led to market volatility in recent trading.”
Sandbakken pointed out that global sunflower production for 2023-24 is going to be a moving target because of the uncertainty about how much actually gets planted in Ukraine this year.
“The war in Ukraine has left much uncertainty of what seed availability will be like this year and potentially in 2024, as well,” he said. “Ukraine was one of the major producers and exporters of sunflower oil accounting for 50 percent of global sunflower oil trade. The events in Ukraine escalated an already tight vegetable oil market.
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“This conflict between Ukraine and Russia bears watching as it has significantly increased the uncertainty of the agricultural supply and demand conditions in the region and globally,” he added.
In early May, old crop sunflower prices at the North Dakota crush plants were down 25 to 40 cents with new crop down 50 cents to unchanged. Old and new crop prices were unchanged at the Lamar, Colo., plant.
Looking at local crush plant prices, as of May 8, nearby NuSun prices at the ADM crush plant in Enderlin, N.D., were listed at $21.10 per hundredweight for May delivery and $21.30 for June delivery. At the Cargill plant in West Fargo, N.D., nearby NuSun prices were listed at $20.75 per hundredweight for delivery in May and $21.25 for delivery in June.
High-oleic sunflower prices were listed at $21.60 for delivery in May and $21.80 for June delivery at ADM in Enderlin. At Cargill in West Fargo, the May delivery price for high-oleic sunflower was $21.25 for May delivery, and $21.75 for delivery in June.
Looking at 2023 new crop cash and Act of God (AOG) contracts for NuSun sunflower, the ADM plant in Enderlin was offering $23.25 cash and $22.75 with an AOG clause. Cargill in West Fargo was offering $22.50 cash.
New crop high-oleic sunflower contracts were $24.45 cash and $23.95 with an AOG at Enderlin, while West Fargo offered a cash price of $24 and $23.50 with an AOG clause. Elsewhere in North Dakota, Pingree was offering $23.45 cash and Hebron was offering $22.85 cash.
Lastly, besides keeping an eye on planting progress, the North American oilseed market will shift its attention to demand news, weather, crop conditions and production prospects in the months ahead.