In W31 in the soybean oil landscape, soybean oil futures on the Chicago stock exchange experienced fluctuations during the week. On Tuesday, August 2, soybean oil futures for September delivery closed up 0.42% to USD 64.66. Meanwhile, on August 3, soybean oil futures closed down 0.96% to USD 64.04, influenced by favorable crop conditions in the soy/corn belt in the United States (US), which contributed to pressure on oilseed prices. Regions with water deficits experienced rainfall, and a forecast of additional precipitation and milder weather emerged.
Nevertheless, soybean oil futures in Chicago have soared since the US Department of Agriculture (USDA) area report brought a reduction in the area devoted to oilseed in the US crop. There is potential for a 20% annual growth in soybean oil usage for biofuel if historical proportions are maintained. However, challenges, including decreased planting area and less optimistic soybean yield estimates, may limit crushing capacity. Consequently, addressing the heightened biofuel demand would require a 7% growth in crushing while the US crop remains relatively stable. The situation implies a potentially tight scenario, although production outcomes remain uncertain.
China's soybean oil import is expected to triple in 2023 due to low raw material stocks, with Russia also contributing to China's soybean oil supply. Anticipated imports for Jul-23 to -Sept-23 might surpass 300 thousand metric tons (mt), nearly three times the amount imported during the same period in 2022. China's soybean oil inventories decreased by Jul-23, attributed to declining soybean processing and oil production capacity. China plans to import 200 thousand mt of soybean oil from Argentina and 100 thousand mt from Brazil to meet demand.
In July, India set a new record by importing 1.76 million metric tons (mmt) of vegetable oil, a move driven by refiners building up stockpiles before festivals due to unstable supplies from the Black Sea region and a growing discount on palm oil compared to soybean and sunflower oils. However, soybean oil imports decreased by 22% month-on-month (MoM) in July, reaching 340 thousand mt. This decline is attributed to delays in unloading ships at the port of Kandla.