The settlement price of Soybean Oil (Mar 24) on the Chicago Board of Trade (CBOT) increased from $952/mt to $973/mt compared to the same period last week, while Soybean (Mar 24) saw a recovery in its settlement price on CBOT, rising to $411/mt after a previous drop. Traders attribute the strength of soy oil to reports that a new Phillips 66 renewable diesel plant in Rodeo, California, has overcome regulatory hurdles, paving the way for its operational commencement. This positive trend is further supported by stronger global energy prices.
However, Chicago beans are facing pressure due to buyers preferring Brazil’s beans. The improved weather conditions in Brazil also contribute to this trend. Lower prices for Brazilian beans and a weaker Brazilian Real (BRL) make the origin more appealing to Asian buyers, with current Brazilian Soybean prices at $413/mt, see Figure 1.
Figure 1: Price comparison for Soybean in USD/mt
Brazil’s competitive positioning in the market has led to a significant increase in soybean exports, reaching 29.35% more in 2023 compared to 2022, totalling 101,862,642 MT, see Figure 2. In contrast, U.S. soybean export inspections in the latest week were reported at 1,161,100 metric tons, below the 5-year average of 1,193,494 mt. Strong demand from the U.S. biodiesel industry has mitigated some losses.
Figure 2: Brazilian exports of Soybean in MT
Globally, soybean production for the current season is forecasted at 399 Mt, a 6.3% increase from the previous season, with stocks reaching a five-year high at 70 Mt. The National Oilseed Processors Association (NOPA) reported a record monthly volume of 5.3 Mt of soybeans crushed in December.
Sunflower oil prices have also experienced changes, following the overall trend in vegetable oils. The Vesper Dutch Price Index for Crude Sunflower Oil (2024-01-23) increased to €896 | $975/mt (FOB Rotterdam, FM) from €864 | $945/mt in the same period last week. Meanwhile, the Vesper Russian Price Index for Crude Sunflower Oil (2024-01-23) decreased to €768 | $835/mt (FOB Novorossiysk, FM) from €770 | $843/mt. The Vesper Black Sea Price Index for Sunflower seed (2024-01-19) also decreased to €293 | $320/mt (FOB Black Sea) from €294 | $323/mt on 2024-01-12.
The Black Sea region’s past record exports of sun seeds and oil to the global market have led to manageable stock levels, causing prices to appreciate. However, this has made buyers less interested in new business. Despite this, recent Turkish interest in Ukrainian oil continues to support prices, as reflected in Ukrainian exports to the E.U, see Figure 3.
Figure 3: Sunflower oil exports from Ukraine to Europe 28
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