Weekly Product Updates

W48 Soybean Oil Update: Soybean Futures Fluctuate on Planting Concerns and Climate Conditions, Russian Exports Rise, but African Shipments Decline

Refined Soybean Oil
Brazil
Market & Price Trends
Russia
Published Dec 8, 2023
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Soybean Oil Futures Experience Volatility Amid Market Influences

On Monday, November 27, soybean futures for Dec-23 delivery closed up 0.74% to USD 0.5191 per pound (lb), influenced by export inspection data showing soybean shipments at 1.44 million metric tons (mmt) for the week ending November 23. This represented a drop of 11.5% week-on-week (WoW) and 35.3% year-on-year (YoY). On Tuesday, November 28, the soybean oil futures rose by 2.75% to USD 0.5334/lb, driven by concerns over delayed planting in Brazil due to a water deficit. However, on November 30, soybean oil prices closed down 1.24% at USD 0.5268/lb, attributed to improved climate conditions in Argentina facilitating rapid planting.

US Soybean Oil Sales Reached 700 MT

The United States Department of Agriculture’s (USDA) weekly export sales report on Thursday (November 30) revealed positive signs for the demand for US grains. Soybean oil sales in the US reached 700 metric tons (mt), aligning with market expectations that ranged from cancellation of 5 thousand mt to sales of 10 thousand mt, with Canada being the primary destination.

Russian Soybean Oil Exports Rose 16% YoY in Jan-23 to Oct-23

From Jan-23 to Oct-23, Russian soybean oil exports increased by 16% YoY to 556 thousand mt. India and Algeria were the leading purchasers, with India accounting for 168 thousand mt and Algeria for 139 thousand mt. However, exports to the African region slightly decreased from 260 thousand mt to 232 thousand mt. The decline in Russian soybean oil exports to Africa is attributed to reduced sales to key buyers, including a 7% drop in shipments to Algeria, and deliveries to Tanzania and Tunisia, both among the top five buyers the previous year, were not carried out. Despite a nearly 15% increase in shipments to Egypt, overall exports to Africa are expected to reach 298 thousand mt by the end of the year, down from 334 thousand mt the previous year. Over 40% of Russian soybean oil intended for export is directed to the continent.

Brazil Anticipates Surge in Soybean Processing in 2024

In 2024, analysts predict a further increase in soybean processing volumes in Brazil, driven by anticipated growth in demand for soybean oil in the domestic market from the biofuel industry. However, the export supply of soybeans may decline next year, contingent on the volume of the soybean harvest.

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