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10 January 2025

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SSI Surveillance: Raw Materials (1 – 7 January 2025)

Soybean CBT rose 3.7% in the last 5D, driven by concerns over tight supply in Argentina (the world’s fourth-largest soybean producer). According to Sierra’s weather maps, below-average rainfall is expected to persist through March, fueling supply worries. We anticipate the rise in soybean oil prices to keep CPO prices at relatively high levels.

CPO prices plummeted -7.3% in the last 5D, largely due to reduced demand during winter months as palm oil tends to solidify in colder temperatures, leading buyers to opt for substitutes. The decline is reflected in Malaysia’s CPO shipments, which fell -9.3% MoM in November 2024. Lower CPO prices should benefit UNVR>ICBP>CMRY.

Cocoa prices fell -4% over the past week, as weather conditions in Ivory Coast, the world’s largest cocoa producer, showed signs of stabilization. However, concerns persist over the possibility of prolonged dry weather, as cocoa farmers in Ivory Coast and Nigeria report the seasonal Harmattan winds are beginning to impact cocoa trees, raising fears of reduced production and quality issues. The decline in cocoa prices is likely to have the most significant impact on MYOR given 11% of its COGS are chocolate.

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