In W41 in the soybean oil landscape, on Tuesday, October 10, soybean oil futures for Oct-23 delivery on the Chicago Commodity Exchange (CBOT) closed down by 2.02% at USD 0.5613 per pound (lb) due to favorable weather conditions for harvesting in the United States (US) soybean/corn belt, leading to seasonal downward pressure on prices. On Wednesday, October 11, soybean oil futures dropped to USD 0.5315/lb amid ample global supplies, with the United States Department of Agriculture (USDA) estimating record Brazilian oilseed production at 163 million metric tons (mmt). The delay in planting in Brazil is preventing prices in Chicago from falling even further. However, on Wednesday, October 12, soybean oil futures rebounded, closing up 1.87% at USD 0.5447/lb following the announcement of cuts in American production.
According to the Food and Agriculture Organization of the United Nations (FAO), global vegetable oil prices decreased by 3.9% month-on-month (MoM) in Sept-23, marking the second consecutive monthly decline. The drop in international soybean oil prices was influenced by abundant export supplies worldwide despite increasing demand from the biodiesel sector.
Brazil experienced a slight decrease in soybean product exports in Sept-23, with soybean oil shipments dropping to 154.6 thousand metric tons (mt) due to maintenance-related shutdowns at some crushing plants. Nonetheless, year-to-date soybean oil shipments were slightly higher than the previous year, reaching 2 mmt. The main importers of Brazilian soybean oil since the beginning of 2023 have been India at 1.1 mmt, China at 210,278 mt, and Bangladesh at 201,378 mt.
Lastly, the Iranian government will impose a ban on the import of soybean and sunflower oils from Oct-23 for 1 to 2 months. This measure aims to reduce unusually high inventories of sunflower and soybean oils. Reserves of vegetable oils in Iran reached a record level by the end of Sept-23, exceeding the previous year by 150 to 200 thousand mt. Notably, 250 thousand mt of soybean oil have been purchased, with significant quantities from South America, Turkey, and Russia.