W36: Soybean Oil Update

In W36 in the soybean oil landscape, on Tuesday, September 5, soybean oil futures for Sept-23 delivery dropped 0.76% to USD 0.6426 per pound (lb) on the Chicago Commodity Exchange (CBOT). This decline was influenced by factors such as rainfall in certain regions affecting productivity, strengthening of the United States (US) dollar against the real, and concerns about changes in derivatives due to the "Soy Dollar 4" rules. The soybean oil closed down 0.75% to USD 0.6378/lb on Wednesday, September 6, and 2.65% to USD 0.6209/lb on Thursday, September 7. This is due to the expected surge in demand for Brazilian soybeans in Sept-23 compared to the previous year and the recent recovery in demand for American grain.

In India, soybean oil imports grew by 3.7% month-on-month (MoM) in Aug-23 to reach 355 thousand metric tons (mt). This surge in edible oil imports was driven by the Indian government's decision to raise import duty discounts on sunflower and soybean oil to 12%, despite only moderate demand. The purchase also helped strengthen soybean oil futures. Furthermore, over the first ten months of the 2022/23 period, India imported 14 million metric tons (mmt) of edible oils, with 3.2 mmt being soybean oil.

From Jan-23 to Jul-23, the soybean complex, comprising soybeans, soybean meal, and soybean oil, was a significant export from Brazil's Paranaguá and Antonina ports, with an average daily export value of USD 34 million. During this period, 3.24 mmt of these three products were exported from Paraná ports, including 971,839 mt of soybean oil. India and Bangladesh were the major destinations for soybean oil shipments. Additionally, during the first seven months of 2023, Brazil exported 1.73 mmt of soybean oil.

Lastly, in Aug-23, Ukraine exported 548.9 thousand mt of vegetable oils, with soybean oil accounting for 2% of the oil export structure, slightly lower than the 549.4 thousand mt exported in Jul-23.

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