1. Weekly News

Global

Global Soybean Oil Futures Drop 5% Amid Policy Uncertainty

Soybean oil futures on the Chicago Board of Trade (CBOT) have declined 5% over the past two sessions, falling to USD 954 per metric ton (mt) for Dec-24 delivery, despite a 1.9% month-on-month (MoM) increase. The drop follows uncertainty regarding the future of green energy programs amid administrative changes in the United States (US) government.

This bearish trend persists despite bullish fundamentals. The United States Department of Agriculture (USDA) has lowered the US soybean harvest forecast to 121.42 million metric tons (mmt) due to reduced yields. In addition, record-high processing in Oct-24 reached 5.44 mmt—up 5% from the same month last year, according to the National Oilseed Processors Association (NOPA).

Brazil

Brazil's Soybean Oil Production and Exports in 2025

Brazil is projected to produce 167.7 mmt of soybeans in 2025, a 9.4% increase from 2024, driven by improved productivity. Soybean processing is forecasted to reach a record 57 mmt, boosting soybean oil production by 3.6% to 11.4 mmt.

However, soybean oil exports are forecasted to decline sharply by 23.1% YoY to 1 mmt as domestic consumption rises, partly due to an increase in the biodiesel blend in diesel from 14% to 15%. While soybean meal exports are expected to grow, the overall export revenue from the soy complex may drop to USD 50.88 billion due to lower global prices for soybeans and soybean meal. Soybeans remain Brazil’s top export product, heavily influencing national revenue.

Russia

Russia's Soybean Oil Exports Surge Amid Record Harvests and Increased Global Demand

In the 2024/25 season, Russia's soybean oil exports are projected to grow 14% year-on-year (YoY) to 860,000 mt, driven by record production exceeding 1.1 mmt. From Jan-24 to Oct-24, exports rose 13% to 629,000 mt, with India leading as the largest importer with 253,000 mt. Analysts suggest exports could reach 870,000 mt if soybean imports remain steady under government allowances.

Meanwhile, Russia's soybean exports are expected to decline to 900,000 mt, down from 1.1 mmt tons last year, reflecting a shift toward exporting higher-value products. Supported by a record harvest exceeding 7.5 mmt, Russia ranks sixth globally in soybean cultivation, with 4.3 million hectares (ha) sown this year. Key buyers of Russian soybean oil include India, Algeria, and China.

Russian Soybean Exports to China Halve as Domestic Harvests and Chinese Production Rise

In Oct-24, Russia's soybean exports to China dropped by half YoY to USD 21.9 million, with total exports from Jan-24 to Oct-24 falling to USD 284.4 million from USD 590.8 million in 2022. Soybean oil exports followed a similar trend, declining sharply to USD 7.1 million in Oct-24, four times less than last year—though the year-to-date drop was more modest at USD 112.8 million against USD 120.8 million.

Meanwhile, China remains the global leader in soybean oil production, reaching 17.7 mmt in 2023, a 3% YoY increase. Analysts project a 4% YoY rise this year, surpassing 18 mmt. Furthermore, Russia's soybean harvests expanded to 6.8 mmt in 2023, with cultivated areas up 18.4% from the previous year. The Ministry of Agriculture forecasts the harvest may approach a record 7 million tons.

United States

US Soybean Oil Production Hits Record Levels as Stocks Slightly Increase

US soybean processing reached a record 199.959 million bushels in Oct-24, a 5.4% YoY increase from Oct-23 and 12.8% higher than Sep-24 according to NOPA. This surge reflects expanded processing capacity to meet biofuel producers' rising demand for vegetable oil.

Soybean oil stocks among NOPA members increased to 1.069 billion pounds (lbs) from 1.066 billion lbs on Sep-24, the lowest since Nov-14. Despite the rise, stocks were below analysts' expectations of 1.090 billion lbs. The Oct-24 crush also incorporated output from a new NOPA member from South Dakota, with further additions expected in subsequent months.

2. Weekly Pricing

Weekly Soybean Oil Pricing Important Exporters (USD/kg)

Yearly Change in Soybean Oil Pricing Important Exporters (W47 2023 to W47 2024)

Brazil

Brazil's soybean oil prices increased to USD 1.25 per kilogram (kg) in W47, up 5.93% week-on-week (WoW) and 22.55% YoY, influenced by strong domestic demand and favorable weather supporting crop development. Furthermore, Brazil's production is expected to rise in early 2025. The upward trend in Brazilian soybean oil prices could lead to higher export costs, potentially affecting future global pricing dynamics as supply and demand realign.

United States

In W47, US soybean oil prices decreased to USD 0.96/kg, marking a 4.95% WoW and 16.52% YoY decline. The primary driver was uncertainty surrounding green energy programs following administrative changes, which overshadowed supportive market fundamentals. Amid the negative market outlook, Oct-24 saw record soybean processing of 5.44 mmt, up 5% YoY, according to NOPA, reflecting strong demand. However, the USDA's World Agricultural Supply and Demand Estimates (WASDE) report forecasted a 3.28 mmt reduction in the 2024 soybean harvest to 121.42 mmt due to lower yields (3.47 mt/ha). This price trend suggests that policy uncertainty may continue to weigh on soybean oil prices, even amid strong processing and tightening supply, potentially influencing future pricing volatility.

Netherlands

In W47, soybean oil prices in the Netherlands declined by 3.39% WoW to USD 1.14/kg. Despite the drop, future pricing remains uncertain as the Netherlands, a key importer and re-exporter of soybean oil, faces increasing regulatory pressures from the European Union’s (EU) May-24 deforestation rules. These rules aim to restrict trade in deforestation-linked products, potentially disrupting the soybean oil supply chain. With soybean imports already down 21% since 2002, further reductions could tighten supply and increase costs. While prices recently softened, regulatory impacts could exert upward pressure on Dutch soybean oil prices in the medium term, depending on import volumes and compliance costs.

3. Actionable Recommendations

Mitigate Risks from Policy Uncertainty

Importers and processors should employ hedging strategies, such as futures contracts, to mitigate risks associated with volatile soybean oil prices driven by US policy uncertainty. Current price declines provide an opportunity to secure lower-cost contracts, ensuring cost stability while the market adjusts to potential changes in green energy programs.

Expand Sourcing from High-Production Regions

Exporters and importers should capitalize on projected production growth in Brazil and Russia. Forecasted at 11.4 mmt in 2025, Brazil's expanding soybean oil production offers a robust supply source. Similarly, Russia's anticipated 14% YoY export growth to 860,000 mt presents an opportunity for diversifying suppliers, particularly for markets like India and China, where demand remains high.

Strengthen Regional Partnerships for Biodiesel Markets

Companies involved in biofuel production should leverage Brazil's increased biodiesel blend mandates (15%) to strengthen partnerships with Brazilian suppliers. Investing in infrastructure or forming joint ventures can ensure reliable access to soybean oil and capitalize on rising domestic demand trends, especially as global prices align with higher domestic consumption.

Sources: Rosng, Interfax, Agro Investor, Portal Do Agronegócio, Hellenic Shipping News, Canal Rural