In W35 in the soybean oil landscape, there were fluctuations in prices on the Chicago Commodity Exchange (CBOT). On Tuesday, August 29, soybean oil futures for Dec-23 delivery dropped 0.18% to USD 63.33 cents per pound (lb). This drop came after four consecutive sessions of gains, triggered by the United States Department of Agriculture's (USDA) report from Monday indicating better-than-expected soybean crop conditions in the US. On Wednesday, August 30, soybean oil closed down 1.1% to USD 62.63 cents/lb primarily due to robust demand for US soybeans, further supported by a 266 thousand metric ton (mt) sale announcement by private exporters to undisclosed destinations by the USDA. The trend continued on Thursday, August 31, with soybean oil futures dropping by 0.24% to USD 62.48 cents/lb, driven by a stronger US dollar that impacted the competitiveness of US soybeans. Market attention remains on the development of the American crop, particularly as weather forecasts predict above-average rainfall in the primary grain-producing regions over the next ten days. Despite these fluctuations, the market performed positively in August, buoyed by robust demand and crop developments.
Argentina’s soybean processing has reached its lowest levels in 15 years, totaling 11.9 million metric tons (mmt) from Apr-23 to Aug-23. This decline is attributed to a 50% year-on-year (YoY) drop in the 2023 soybean harvest, which amounted to 20 mmt. Despite record grain imports, factors such as drought and the suspension of domestic bean sales have limited the availability of beans for processing into soybean oil, flour, and pellets. If this trend continues, the Rosario Grain Exchange predicts that the soybean oil industry may operate at up to 70% idle capacity by the end of 2023.