Soybean oil exports from Argentina, Brazil, Paraguay, the United States (US), and Ukraine reached a 10-year low of 386 thousand metric tons (mt) in Oct-23, down from 559 thousand mt in Sept-23 and 466 thousand mt in Oct-22. Brazil and Argentina experienced significant declines, with Brazilian shipments nearly halving from 155 thousand mt in Sept-23 to 83 thousand mt in Oct-23 and Argentina's exports dropping 30% month-on-month (MoM) in Oct-23 to 225 thousand mt. The global soybean oil supplies for Jan-23 to Oct-23 also decreased to 6.4 million metric tons (mmt), marking the lowest level in the last nine years. High competition from palm, sunflower, and rapeseed oils impacted the soybean oil segment's share in the global vegetable oil market.
On Monday, November 20, futures for Dec-23 delivery closed up 2.11% to USD 0.531 per pound (lb). . After three consecutive falling sessions, oilseed prices experienced technical corrections, accumulating losses of 3.56% on account of the election in Argentina and the weather in Brazil. On Tuesday, November 21, soybean oil closed up 2.03% at USD 0.5419/lb, rising despite the forecast of improved weather conditions in Brazil and Argentina over the next two weeks, with more rain and lower temperatures. However, on Wednesday, November 22, soybean oil closed down 1.09% at USD 0.5360/lb, with a cautious position ahead of the North American holiday of Thanksgiving.
In the US, soybean oil prices surged by 42% from the end of May-23 to mid-August, driven by climate instability in the US soybean-producing region coupled with uncertainties about the country's production, and robust demand from the biofuels sector.
However, since mid-August, soybean oil prices have generally trended downward, influenced by expectations of increased supply with the arrival of the new American harvest in Oct-23 and reports of well-supplied diesel and biodiesel refineries in the US for the remainder of the year. As a result, Q3-23 concluded with a 9.5% decline in soybean oil prices, quoted at USD 0.56/lb. The anticipation of increased soybean oil supply in the US has contributed to a bearish outlook for stock market prices despite the negative impact of dry weather on the American Midwest harvest.
In Brazil, soybean and soybean oil prices rose strongly in W46 amid dry and hot weather in central Brazil but eased slightly at the end of the week as traders started to book profits. Dec-23 soybean futures on the Chicago Stock Exchange rose 3.4% early in W46 before falling 2.7% to USD 1,145/mt (up 1.4% week-on-week ) but dropped 3.5% MoM after a 5% drop in oil prices.
The Brazilian Association of Vegetable Oil Industries (ABIOVE) reported that in Sept-23, almost 4 mmt of soybeans were processed, reflecting a 9.4% decrease MoM but an 8.7% year-on-year (YoY) increase. Soybean oil production from Jan-23 to Sept-23 reached 7.3 mmt and is anticipated to reach 10.8 mmt by the end of the year. Additionally, in Oct-23, international sales of soybean oil from Brazil totaled 2.1 mmt, indicating a slight YoY drop of 0.7%.