Opinion

W20: Soybean Oil Update

Published May 24, 2023
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W20: Soybean Oil Update

In W20 in the soybean oil landscape, according to the USDA, global vegetable oil production may increase by 3%, in the 2023/24 season due to the rise in soybean and palm oil output as well as the recovery in the olive sector, with consumption also expected to rise by almost 3% or 6.7MMT. In Brazil, soybean oil exports are projected to decrease by 17.2% YoY in 2023 by the Brazilian Association of Vegetable Oil Industries (Abiove). The organisation also lowered its prediction for soy complex export revenue to a record USD 65.9B from USD 67.4B in the April forecast due to decreased prices of grain, bran, and oil. On the Chicago Stock Exchange, the July soybean oil contract on May 15 was up 0.34% to 49.69 cents/lb but dropped 4.51% on May 16 to 47.45 cents/lb, a drop of 15% MoM under pressure from good planting rates in the US. The prices were also pressured by the reduction of the amount of soybean processing in the US in April by 6.8% MoM to 4.71MMT and the increase in soybean oil stocks from 840K MT to 888.5K MT, while analysts predicted them at the levels of 4.74MMT and 830K MT, respectively. The decline continued on May 18 by 2.19% to 46.41 cents/lb, the lowest value in Chicago since mid-February 2021, due to a reduction in the world price of oil, which pulled down the price of soybean oil. However, on May 19, the price went up 1.90% to 47.29 cents/lb. Lastly, during W20, soybean oil stocks in the US increased by 12% to 670K MT, but 17% lower YoY.

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