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W7 Soybean Oil Update: USDA Revises Global Soybean Oil Production for 2023/24 Season and Ukrainian Soybean Oil Exports Surge by 26% in 2023

Soybean
Published Feb 25, 2024
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In W7 in the soybean oil landscape, the USDA has revised its global soybean oil production projection for 2023/24 to 222.83 million tons, up from 217.67 million tons in the previous year. The forecast predicts a 4.4% YoY increase in soybean oil production, the largest percentage increase in three years. Consumption is forecasted to grow larger but slower, with a positive 9 thousand mt outstripping consumption for the first time in three years. Ending stocks are forecast to increase for the first time in four years, reaching the highest level in three years. The average price for soybean oil is expected to fall by 12% from the current marketing year to USD 0.45/lbs, down 38.4% from the 2021/22 average of USD 0.73/lbs. Ukrainian soybean oil exports surged by 26% in 2023, reaching 298 thousand tons and 379 thousand tons, respectively. The EU's lack of restrictions on Ukrainian soybean products confirms its need for these goods, making Ukraine the leading export destination.

USDA Adjusts Global Soybean Oil Production Projection to 61.89 Million Tons for 2023/24

According to the Feb-24 report from the United States Department of Agriculture (USDA), world vegetable oil production for the 2023/24 season is projected to reach 222.83 million tons, up from 217.67 million tons in the previous year. The USDA slightly adjusted the figure downward from Jan-23's estimate of 223.03 million tons. Specifically, the forecast for soybean oil output was revised from 61.91 million tons to 61.89 million tons.

Soybean Oil Production to Increase by 4.4% in 2024/25

The USDA predicts a neutral soybean oil production in North America and consumption forecast for 2024/25. The forecast shows a 4.4% year-over-year (YoY) increase in soybean oil production, the largest percentage increase in three years. Consumption is also expected to grow larger but at a slower rate. The production less consumption calculation results in a positive 9 thousand metric tons (mt), outstripping consumption for the first time in three years. Ending stocks are forecast to increase for the first time in four years, reaching the highest level in three years. The average price for soybean oil is expected to fall by 12% from the current marketing year to USD 0.45 per pound (lb), down 38.4% from the 2021/22 average of USD 0.73/lb.

Ukrainian Soybean Oil Exports Surged by 26% in 2023

According to a report released on Feb-24, there was a significant increase in the volume of export deliveries for soybean oil from Ukraine to European Union (EU) countries, reaching 298 thousand tons, a 26% increase compared to the previous period. Additionally, there were notable increases in the export volumes of rapeseed oil, which amounted to 379 thousand tons, marking a substantial 476% increase. These figures indicate a positive trend in the export market for both soybean and rapeseed oils, reflecting potential growth and demand in the industry.

High Soybean Oil Exports from Ukraine Due to EU Demand in 2023/24 Season

In 2023, Ukraine harvested a record soybean crop, leading to the highest soybean oil exports in the first five months of the 2023/24 season in the last four years, with almost 47% of the export potential realized by February 1. The EU's lack of restrictions on Ukrainian soybean products confirms its need for these goods, making the EU countries the leading export destination. However, despite strong demand, farmer demand for soybean seed exceeds supply, potentially impacting the final soybean acreage depending on seed availability in the coming weeks.

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