In W42 in the soybean oil landscape, on Monday, October 16, soybean oil futures for Dec-23 delivery on the Chicago Commodity Exchange (CBOT) closed up by 2.80% at USD 0.5590 per pound (lb), driven by robust demand for soybean and its by-products, including a significant sale of soybean meal to the Philippines and a rise in domestic demand in the United States (US) for soybean oil. On October 17, soybean oil futures closed down by 0.98% to USD 0.5535/lb. The following day, on October 18, these futures further dropped to USD 0.5315/lb, mainly due to abundant global supplies. The United States Department of Agriculture (USDA) reported record-high Brazilian soybean production at 163 million metric tons (mmt) in the 2023/24 season. The delay in planting in Brazil is preventing soybean oil prices in Chicago from declining even further.
A surge in US biofuel demand is leading to a second consecutive year of the country becoming a net importer of soybean oil in the 2023/24 marketing year (MY). This growing demand is causing the US to shift from a major exporter to a net importer of soybean oil. The US is estimated to export 159 thousand mt of soybean oil derivatives while importing 181 thousand mt in the 2023/24 MY. The forecast for US soybean oil consumption has been revised upward to 12.29 mmt from 12.02 mmt, primarily due to its use in biofuel production. The USDA's World Agricultural Supply and Demand Estimates report also projects an increase in domestic soybean oil consumption for biofuel production, reaching 12.8 billion pounds, compared to the previous Sept-23 estimate of 12.5 billion pounds. In contrast, US soybean oil production is estimated at 12.25 mmt, slightly down from the previous year's figure of 11.91 mmt.
The Brazilian Association of Vegetable Oil Industries (ABIOVE) released updated statistics on the soybean complex in Brazil until Aug-23 and provided initial projections for the 2024 harvest. From Jan-23 to Aug-23, soybean oil production remained steady at 10.8 mmt. Soybean oil exports for 2023 are expected to reach 2.4 mmt. Looking ahead to 2024, production estimates are expected to be very similar to this year, with projections of 10.9 mmt for soybean oil.
Lastly, in the 2023/24 season, Russia is expected to increase its soybean oil exports by 13%. Meanwhile, in the 2022/23 season, soybean oil production in Russia surpassed 1 mmt, with exports growing by 18% to reach 662 thousand mt. A third of exports (216 thousand mt) were destined for Algeria, with India and China also among the key importers.