Weekly Product Updates

W43: Soybean Update

United States
Published Nov 2, 2023

In W43 in the soybean oil landscape, on Wednesday, October 25, soybean oil futures for Dec-23 delivery on the Chicago Commodity Exchange (CBOT) closed up by 2.49% at USD 0.5260 per pound (lb). This rise followed the United States Department of Agriculture (USDA) announcing the sale of 126 thousand metric tons (mt) of soybeans to China. Moreover, Brazil's soybean planting advanced 13% points in the week, to 30% completed. However, on October 26 soybean oil futures closed down 1.63% to USD 0.5174/lb. This drop was attributed to improved weather conditions in Argentina and Brazil, including rain in planting areas. Weather forecasts suggest heavy rain in some regions, and this change in climate affected market sentiment.

Brazil's soybean crushing is expected to reach a record high of 54 million metric tons (mmt) in 2024, up from 53.5 mmt in 2023, driven by increased demand for soybean oil in the biodiesel sector, according to a report from the Brazilian Vegetable Oil Producers Association (ABIOVE). Soybean oil production is forecasted to rise from 10.8 mmt in 2023 to 10.9 mmt in 2024, leading to an increase in the country's soybean oil reserves to 418 thousand mt from 268 thousand mt in 2023. As a result, the forecast for soybean oil exports is expected to decrease to 1.6 mmt in 2024 from 2.4 mmt in the current year due to higher domestic demand.

By October 20, Russian farmers had harvested 24 mmt of oilseeds, marking a 1.5-fold increase compared to the same date in 2022. Oilseed processing also demonstrated positive growth, with 652.9 thousand mt of soybean oil produced from Jan-23 to Aug-23, showing an 11.7% increase compared to the same period in 2022.

In 2023, Ukrainian enterprises are expected to process 15.6 mmt of oilseeds, including 300 thousand mt of soybean oil, according to forecasts from the Ukroliyaprom Association.

Lastly, Iran imposed a ban on the import of soybean and sunflower oils starting on October 23. The Ministry of Agriculture initiated the ban to regulate the edible oil market, but the exact reason for the ban is unclear, whether it is due to an oversupply of these oils or an attempt to prevent further price reductions.

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