Datetime: 2025-05-28 08:02:22 Visit: 6681
Soybean Oil Market Changes
Recently, the international soybean oil market has shown a complex and changeable situation. Affected by various factors, the price fluctuates sharply, and the supply and demand pattern has also changed significantly.
Judging from the price trend, soybean oil prices have fluctuated in recent times. On May 16, Chicago soybean oil futures fell across the board, hitting the largest single-day drop since June 2023, dragging soybean futures down from a nearly 10-month high. However, before that, the soybean oil market had risen for three consecutive days due to the US House of Representatives' proposal to extend the 45Z biofuel tax credit policy. On May 22, market rumors that the US government plans to grant 163 small refinery exemptions (SREs), which will reduce the actual mandatory blending volume of US biodiesel, caused US RINs, US soybean oil, US soybeans, and Canadian rapeseed futures to open sharply lower.
On the supply side, the supply of South American soybeans has attracted much attention. Argentina, the top soybean oil exporter, has a bumper soybean harvest. On May 14, the Rosario Grain Exchange raised its soybean production by 3 million tons to 48.5 million tons, further exacerbating expectations of loose global supply. As for U.S. soybeans, weekly data from the USDA showed that as of May 11, the U.S. soybean planting rate was 48%, higher than the market's expectation of 30% last week, higher than 34% in the same period last year, and higher than the five-year average of 37%. The May USDA supply and demand report also adjusted the harvest area of new-season U.S. soybeans to 82.7 million acres and gave a high yield expectation of 52.6 bushels per acre.
On the demand side, U.S. soybean oil export sales data reflects changes in market demand. The export sales report released by the U.S. Department of Agriculture for the week ending May 15, 2025 showed that the net sales of U.S. soybean oil this year were 13.7 thousand tons, while the net sales next year were 0.0 thousand tons. Its main export markets, such as Mexico and Canada, are also affected by their respective economic environments and local production and competition with other countries. In addition, biofuel policies have a huge impact on soybean oil demand. The head of the U.S. Environmental Protection Agency (EPA) announced the postponement of the final decision on the 45Z tax credit and the reduction of the biomass diesel blending target, and the market's expectations for the outlook for soybean oil demand deteriorated rapidly. However, there were also reports that the U.S. government and large oil companies had reached a consensus on increasing the biomass diesel quota. The market had expected that the EPA might significantly increase the biomass diesel blending obligation RVO, which pushed up the price of U.S. soybean oil. The implementation of the U.S. biodiesel policy in the later period remains to be seen.
The international situation and policies also have a profound impact on the soybean oil market. The easing of Sino-US trade relations has boosted the market to a certain extent. On May 12, China and the United States issued a joint statement to reduce some of the tariffs imposed since the previous trade dispute. Affected by this, the main futures price of Chicago CBOT soybeans rose by 1.69% on the same day, which in turn led to an increase in the cost of domestic imported soybeans arriving at the port. However, Chicago Agricultural Resources also warned that if the negotiations fail, U.S. soybean exports may drop by 20%.
