Soybean Oil Market Regular Updates NOV 22, 2023

Enhancing Soybean Insights: Market Trends and Projections

Exploring Soybean Futures and Market Dynamics
In the realm of soybean trading, January delivery futures have declined by 20.75¢, reaching $13.56¼ per bushel. Concurrently, soymeal experienced a slight decline of $1.1 to $458.10 per short ton, while soy oil displayed resilience, slumps 0.59¢ to reach 53.60¢ per pound.

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Canadian Grain Outlook Production And Export Forecasts
Canadian grain, pulse and oilseed production fall year-on-year, according to the October outlook for principal field crops from Statistics Canada. With the winter-spring crop harvest done and dusted and the summer crop harvest drawing to a close, Canada’s principal field crop production is estimated to have decreased by 13pc from 97.1 million tonnes (Mt) in 2022-23 to 84.5Mt this season. Abandonment of parched crops saw a one percent increase in the planted area compared to the previous season eroded by the time headers started to roll this year, resulting in an unchanged harvested area of 30.5 million hectares (Mha). The average yield across all crop types fell from 3.19 tonnes per hectare to 2.77t/ha.

• Production Overview:

The principal field crop production in Canada for 2023/24 is estimated to be 84.5 million tonnes, reflecting a 13% decrease from the previous year.

• Export Forecast:

• Climate Impact:

The Prairies, Canada’s major crop-growing region, has experienced increasing temperatures and drier conditions over the past 120 years, affecting crop yields.

Kyrgyzstan’s Sunflower Oil Import Decline
Kyrgyzstan witnessed a 19.1% reduction in sunflower oil imports during January-September 2023, importing 25,200 tons compared to 31,200 tons in the same period last year. The dollar equivalent of sunflower oil imports also decreased by 41.8%, totaling $27.2 million.

Notably, 83.7% of sunflower oil imports were from Russia, with an additional 16% sourced from Kazakhstan. Smaller quantities also came from Armenia and Azerbaijan.

Brazil’s Soybean Predicament: Weather Challenges and Production Outlook
Brazil, a key player in global soybean production, faces weather extremes impacting the 2023/24 crop. Central and northeastern regions grapple with hot and dry conditions, while the far south contends with excessive wetness. Despite these challenges, Agroconsult forecasts a record soybean crop of 161.6 million metric tons. Brazil, soybean oil exports, experienced a drastic 46% reduction from 155 thousand tons to 83 thousand tons last month. A parallel trend is observed in Argentina, where monthly exports dwindled by 30% to 225 thsd tonnes.

Central Brazil faces delayed planting, poor emergence, and irregular stands due to record high temperatures and dry soil moisture. Adverse weather in center-northern Brazil is expected to cap this season’s crop by 7.6 million tons. Central Brazilian producers have been waiting for a long time, but rain has finally started to move in with a more consistent clip over the past few days and the forecast favors this to continue for a while.

Even so, the dry start to the wet season has been harmful and there are areas of the region that have yet to benefit from the increased rainfall in recent days.

An analysis of rainfall from Nov. 17-22 shows widespread rainfall occurring across most of Brazil. Rainfall amounts are estimated at 20-60 millimeters (about 0.8 to 2.4 inches) during that time. However, a close examination shows that not all areas have been hit by showers just yet.

Brazil’s soybean exports are estimated at a record 101.1 million tons in 2023, constituting a 28.6% increase from the previous year. However, Agroconsult predicts a decline to 100.9 million tons in 2024. The overall combined soybean output from Brazil, Argentina, Paraguay, Bolivia, and Uruguay is anticipated to reach 228.6 million tons in 2023/24, surpassing the 193.7 million tons produced in the preceding year

Emerging Trends in Global Soybean Oil Market: A Comprehensive Analysis

In a significant shift within the global soybean oil market, exports from key players like Argentina, Brazil, Paraguay, the US, and Ukraine witnessed a notable dip, hitting a 10-year low at 386 thousand tons last month. This downturn is highlighted by OilWorld (Germany), reporting sales at 559 thsd tonnes in September, followed by a drop to 466 thsd tonnes in October 2022.

Global Supplies on a Downward Spiral
Examining the broader scope, global soybean oil supplies from January to October dwindled to 6.4 million tonnes, marking the lowest point in the past 9 years. Analysts attribute this decline to the heightened competition posed by palm, sunflower, and rapeseed oils.

Contrary to the global downturn, the European Association of Vegetable Oil Producers (FEDIOL) notes a positive upswing in oilseeds processing. In October 2023, EU oil extraction plants processed over 3 million tonnes of oilseeds, reflecting a modest increase of 0.014 million tonnes from the previous month.

While soybean processing faced a 20% dip last month, rapeseed processing in local enterprises rose by

6% to 1.684 million tons in October and 10% to 15.926 million tons from January to October 2022.

In a notable contrast, sunflower production witnessed a steady month-on-month growth. October 2023 saw 589 thsd tonnes of sunflower seeds delivered to mills, a 21% increase from the previous month and a cumulative 20% rise to more than 4.9 million tons since the year’s beginning.

Ukraine’s Soybean Boom: Breaking Records
Ukraine emerges as a frontrunner in the soybean market, having exported 425 thousand tons in the first 20 days of November. Analysts predict that reaching 560 thousand tons this month would set an all-time record for Ukraine’s independence.

Ukrainian soybeans, priced $40-50 per ton cheaper than American and Brazilian counterparts, find a robust market in the EU. The surge in soybean exports is buoyed by escalating prices in Europe for soybean meal, up by $120 per ton.

Despite the current boom, analysts anticipate a temporary slowdown in December due to a potential increase in supply, temporarily affecting price dynamics.

In conclusion, the soybean market’s intricacies reflect a delicate dance of supply, demand, and global dynamics. As we navigate these fluctuations, staying attuned to market trends and agricultural forecasts is paramount across the supply chain. So we are predicting that soybean market project a neutral trend Projections and as well in hovering within the range of $13.0 to $13.8 per bushel.