For the Quarter Ending December 2024
North America
The North American Soybean Oil market began the fourth quarter with a notable upward trend but ended the period on a more negative note. This shift was influenced by various factors, including global demand-supply fluctuations, which kept overall prices on the decline.
From October to November 2024, prices saw upward pressure driven by supply constraints and strong demand, particularly from the renewable diesel sector. Policy incentives for biofuel production, coupled with an increasing demand for renewable energy feedstocks, tightened soybean oil supplies, which were already strained by unfavorable weather conditions, especially in the Midwest, leading to reduced soybean yields. Additionally, global competition, particularly from Brazil, further exacerbated these challenges, keeping prices elevated despite modest increases in domestic production. Furthermore, In November, the U.S. soybean crop was revised downward due to persistent droughts and heat, raising concerns about supply shortages and temporarily supporting soybean futures. The USDA's WASDE report highlighted strong biofuel demand, sustaining upward price momentum.
However, by December, the market shifted due to global oversupply, particularly from Brazil, and lower crude oil prices reduced biodiesel demand. The stronger U.S. dollar and increased competition from alternative oils like sunflower oil further pressured soybean oil prices. Economic uncertainties, including inflation and potential global slowdown, also dampened demand, leading to a price decline and a slight reduction in ending stocks for the 2024/25 marketing year.
Asia Pacific
In the fourth quarter of 2024, China's soybean oil market saw considerable price fluctuations due to various domestic and global factors. In October, export prices surged as soybean crushing margins remained favorable, boosting production volumes. This, combined with strong global demand for vegetable oils, particularly amid tight palm oil supplies and reduced soybean production forecasts in major exporting nations like the US, pushed prices higher. Concerns over potential supply shortages further intensified demand, prompting international buyers to secure stocks. In November, China's soybean oil export prices continued to rise, supported by strong domestic demand, especially from the food and biodiesel sectors, which limited exportable supply. Global soybean oil supplies were tight due to reduced production and logistical disruptions in key producing regions, reinforcing higher prices. The depreciation of the Chinese yuan also made exports more competitive, despite the rise in local prices. However, by December, soybean oil prices began to soften. Weakened demand from downstream sectors like food processing and livestock, alongside concerns about potential policy changes, dampened market sentiment. Additionally, strong domestic supply and competitive pricing of alternatives like sunflower oil contributed to the decline in prices, leading to a bearish outlook for the market.
Europe
During the entire fourth quarter of 2024, Ukraine’s soybean oil market experienced fluctuations primarily driven by geopolitical tensions, logistical challenges, and shifting global demand dynamics. In October, a surge in export demand, particularly from Europe and Turkey, was observed, supported by rising global consumption of Ukrainian soybeans. This export momentum, fueled by competitive pricing, pushed soybean oil prices upwards, despite broader challenges within Ukraine’s agricultural sector, such as reduced acreage for other crops and increasing logistical costs. The global balance of soybean-derived product prices also played a significant role, with favorable weather in Brazil supporting a bumper harvest, while the U.S. faced slight yield reductions, thus reinforcing Ukraine’s market positioning. However, the conflict with Russia continued to hamper Ukraine's overall economic stability, as reflected in the PMI data indicating a contraction in manufacturing and services, coupled with inflationary pressures and reduced demand from key trading partners. In November, soybean oil prices remained elevated, bolstered by sustained export demand, but limited by domestic logistical constraints and geopolitical tensions affecting supply chains. Concurrently, global competition from palm and sunflower oil further supported soybean oil's price momentum. However, by December, a shift occurred as soybean oil prices fell, primarily due to abundant supply from an increased harvest and high inventories. This surplus was compounded by weak export opportunities and limited domestic demand, exacerbated by competition from sunflower oil. The depreciation of both the euro and hryvnia against the dollar also dampened purchasing sentiment. Seasonal slowdowns, alongside reduced consumer purchasing power and less industrial activity during the holidays, contributed to further downward pressure on prices. Consequently, while Ukraine's soybean oil exports benefited from global trends, the domestic market experienced an overall decline due to excess supply and muted demand.
South America
In Q4 2024, Brazil's soybean oil market faced a significant downward trend due to various domestic and international factors with a modest rise witnessed in the end of the quarter. In October, export prices dropped due to an oversupply of soybean oil, fueled by favorable weather for soybean planting and reduced global demand. Economic challenges in major importing countries, combined with high domestic inventories, led to lower imports, while cheaper alternatives like palm oil gained traction. The depreciation of the Brazilian real also made exports more competitive, contributing to downward price trends. November saw continued pressure as Brazil's soybean production increased by 10% year-on-year, and global stocks reached record highs. Additionally, Argentina’s recovery further intensified competition, while Brazil’s biodiesel policy diverted more oil for domestic use, limiting exports. This resulted in a decline in exports, totaling just 2.55 million tons compared to 5.2 million tons in 2023. Lastly, in December, adverse weather and logistical issues tightened supply, while global demand, particularly from Asia and Europe, increased, pushing prices higher despite the real depreciation. Moreover, global market dynamics, including price fluctuations in related vegetable oils like palm and sunflower oil, exerted upward pressure on soybean oil prices. Lastly, Brazil's biodiesel production mandates, coupled with increasing export activities, further strained the domestic market, pushing prices even higher during this period, and keeping the overall market trading sentiments on the northerly side.
For the Quarter Ending September 2024
South America
Throughout the third quarter of 2024, the Soybean Oil market in South America maintained a stable pricing environment, with minimal fluctuations observed across the region. Various factors contributed to this steady trend, including balanced supply and demand dynamics, stable economic conditions, and consistent global market trends. The market was relatively unaffected by significant disruptions or plant shutdowns during this quarter, allowing for uninterrupted trading activities.
In Brazil, the country with the most notable price changes in the region, the Soybean Oil market demonstrated resilience and stability. Price movements were driven by factors such as the completion of the soybean harvest, sufficient supply levels, and moderate demand from both domestic and international markets. Overall, the pricing trends in Brazil mirrored the stability observed across South America, with prices maintaining a consistent trajectory throughout the quarter.
The quarter-ending price for Soybean Oil FOB Paranagua in Brazil stood at USD 935/MT, reflecting the overall stable pricing environment experienced in the region during the quarter 3 of 2024.
APAC
Throughout the third quarter of 2024, the Asia Pacific region witnessed a notable increase in Soybean Oil price negotiations, influenced by a multitude of factors. The market saw a surge due to heightened demand from various sectors such as food industries and biofuel production. This increased demand, coupled with stable supply conditions, contributed to the upward trajectory in prices. Additionally, rising freight costs and a positive market sentiment further buoyed the pricing environment. In China specifically, the market experienced significant price changes, reflecting the broader trends in the region. The quarter saw a continuation of the positive momentum, with prices steadily increasing. Seasonal patterns and market dynamics played a crucial role in shaping the price trends. Despite a slight dip in prices from the previous quarter, the overall quarter-on-quarter comparison showed a 5% increase, indicating a strengthening market. The quarter concluded with Soybean Oil priced at USD 946/MT FOB Shanghai in China, marking a robust end to the period and demonstrating the sustained upward momentum during the quarter.
Europe
In quarter 3 of 2024, the Soybean Oil market in Europe experienced a significant uptrend in prices, driven by a confluence of factors. High international demand, protracted supply bottlenecks, and currency fluctuations contributed to the overall price increase. The market saw disruptions in production and supply chain, along with plant shutdowns, which further tightened the availability of Soybean Oil, pushing prices higher. In the Netherlands, the market witnessed the most significant price changes, with a notable surge in prices. Seasonal trends and correlation in price changes played a role in the overall price dynamics, reflecting the impact of global market conditions on domestic pricing. The quarter recorded a 6% increase from the previous quarter, with a 2% price difference between the first and second half of the quarter. The latest quarter-ending price was settled at USD 1048 per metric tonne of Soybean Oil FOB Rotterdam in the Netherlands, showcasing a consistent upward trend in pricing throughout the quarter backed by distinct supply and demand dynamics
For the Quarter Ending June 2024
North America
In the U.S., the Soybean oil market is poised for significant shifts, mirroring trends observed in the key producing nations, particularly southern America. The second quarter of 2024 reveals a dynamic landscape with pronounced price volatility, characterized by distinct market behaviors.
April 2024 initiated with robust momentum, marked by rising prices due to insufficient inventory and heightened regional demand. On the supply front, participants in the market continued to grapple with limited supplies of soybean oil in response to inquiries from the regional market. To meet this growing demand, units continue to maintain their manufacturing levels despite facing higher costs, primarily due to input material expenses including limited availability of feed soybeans which has led to a significant increase in procurement levels.
Market participants were opting to replenish their stocks in this environment, resulting in a noticeable growth in both output and new orders at a steady pace. Supporting this, there has been a continuous increase in freight charges compared to the previous month, contributing to an overall positive outlook for market trading sentiments during the entire quarter. Lastly, rising prices in other exporting nations including Argentina, Ukraine and others further influenced the overall market sentiments in the United States as well, resulting in a continuous higher price during the entire quarter.
Asia Pacific
The second quarter of 2024 exhibited a pronounced upward trajectory in soybean oil prices across the APAC region, notably from China, with a steady decline at the quarter's end. This period was characterized by several significant factors influencing market prices. Chief among these were disruptions in the supply chain due to adverse weather conditions in major soybean-producing regions, which affected the harvest and reduced soybean oil availability. Additionally, rising input costs, including fertilizers, fuel, and labor, have amplified production expenses, driving up prices. Increased demand from downstream sectors, particularly the biofuel and food industries, exerted further upward pressure on prices. The continuous rise in global freight costs contributed to this inflationary trend, making exports more expensive and impacting overall market sentiment. In China, which experienced the most substantial price fluctuations, the overall trend was decidedly positive. The country's soybean oil prices soared due to strong demand from end-user sectors and constrained supply. Seasonality exacerbated these factors, with the planting season in major exporting countries contributing to the tight supply situation. The correlation between increased demand and limited supply resulted in a steady price rise within China. Comparing the first and second halves of the quarter, there was a consistent increase in prices, reflecting heightened demand and supply challenges. The quarter-ending export price for soybean oil stands at USD 920/MT, underscoring the robust upward price momentum.
Europe
During the entire second quarter of 2024, the European Soybean Oil market experienced a significant upward trend in prices. This trajectory was influenced by multiple factors, including a substantial drop in regional inventories, continuous heightened demand from downstream sectors, and a significant depreciation of the Euro against the US dollar. The persistent arrival of regional quotations weakened market supplies, and competitive prices from other producing nations, such as those in South America, further influenced this trend. Heavy rains in March and April delayed soybean harvesting in other producing nations, reducing oilseed supplies to the global market. This supply reduction supported price increases in nations including Ukraine, affecting overall supply-demand dynamics. As of April, the FAO Vegetable Oil Price Index averaged 130.9 points, up 0.3 points (0.3 percent) month-on-month, marking a 13-month high. In the Ukrainian market, participants grappled with limited soybean oil supplies amid regional inquiries. To meet growing demand, production units maintained manufacturing levels despite higher costs, primarily due to the limited availability of feed soybeans. On the demand side, persistent strong buying sentiments in the local market, coupled with increased freight charges, contributed to a positive market outlook. Weather disruptions, such as prolonged lack of rain, low soil moisture, dry winds, and varying intensity frosts, stressed crops during critical growth periods. Surveys by the end of May indicated that these conditions potentially impacted crop growth, development, and final yields, reducing soybean availability for downstream oil processing facilities. Additionally, the recent Russian invasion of Ukraine caused global export disruptions, further affecting trading sentiments. This led to higher oil prices across the region and neighboring states due to rising fuel and transportation costs. As a result, the combination of these factors, supported by May's weather disruptions, kept the trading cost of soybean oil on the upper side throughout the quarter. Conclusively, Q2 2024 ended with the price of Soybean Oil at USD 905/MT in Ukraine, underscoring an optimistic pricing environment.
South America
In South America, particularly in Argentina, soybean oil export prices saw a significant rise throughout the second quarter of 2024. This rise in the prices was supported by key factors including weather disruptions, trade disputes, a persistent rise in overseas quotations, limited feed availability, etc. Starting with this, adverse weather conditions in Argentina have led to delays in the soybean harvest, with crops currently in full swing conditions, posing challenges for crop yields and production forecasts. Factors such as weather patterns including pest infestations and dry spells in various parts continue to influence harvest outcomes and market prices for soybean oil. Furthermore, the country continues to face increasing competition from Brazil and the US for global market share, as prices continue to remain elevated in these nations, thereby further supporting the overall price rise. While on the demand side, the global soybean oil market continues to experience robust demand, particularly from major importing nations. This sustained demand is being driven primarily by the biofuel sector. Consequently, the elevated demand has exerted upward pressure on global edible oils such as soy oil prices, leading to a corresponding increase in prices in key exporting nations such as Argentina, the United States, and Brazil. Additionally, price competitiveness witnessed by other producing nations, including European and neighboring states further supports this overall price rise until the final weeks of June. As a result, overall, the second quarter of 2024 was characterized by weather disruptions, trade disputes, persistent rises in overseas quotations, and limited feed availability. These factors collectively contributed to a significant increase in soybean oil export prices, particularly in Argentina and other major producing countries.
For the Quarter Ending March 2024
North America
During Q1 2024, the Soybean oil pricing dynamics in the North American region were influenced by a range of factors witnessed in other exporting nations. The market situation in the USA, where price fluctuations were most pronounced, played a significant role in shaping the overall trend.
The quarter began with a notable rise in prices, driven by the higher demand arriving from the regional market coupled with sufficient inventories balancing the overall demand side. Moreover, owing to a steady price rise witnessed in other exporting nations, the market of the United States continued to follow the market trajectory of these nations thereby resulting in a steady price rise in the month of January to remain competitive within the market. Supporting this, steady rising demand arriving from the downstream food and other industries further contributed to this trajectory. However, the market witnessed a significant drop in prices as February commenced. Additionally, The FAO Food Price Index, which tracks monthly changes in the international prices of a set of globally traded food commodities, averaged 117.3 points in February, down 0.7 percent from January and 10.5 percent from the same month a year ago. The FAO Vegetable Oil Price Index decreased by 1.3 percent from January to stand 11 percent below its February 2023 value. International soy oil prices dropped markedly, underpinned by prospects of abundant soybean outputs in South America, while ample global export availabilities of sunflower and rapeseed oils pushed their prices down further supporting the overall downward trajectory. Lastly, the market rebounded witnessing a steady optimistic trajectory as that of other exporting nations, particularly Brazil. This further kept the overall market sentiments for soybean oil on the upper side supported by the ease in freight costs and appreciation of the dollar against other nations' currency, making the goods less expensive for the merchants and buyers.
Asia Pacific
In Q1 2024, the Soybean Oil market in the APAC region witnessed complex pricing dynamics influenced by various factors beyond the conventional top influences. While the overall trend for Soybean Oil prices in China was on the lower side, some nuances shaped the market situation. The seasonality factor played a role as it was typically an off-season after the Lunar New Year holiday break, resulting in slim domestic demand and weighing on prices. Additionally, China's importation of rival vegetable oils like sunflower seed oil and rapeseed oil at competitive prices partially displaced Soybean Oil demand from South America which further added pressure to prices. Abundant supplies in the domestic market also contributed to falling prices, as China received large volumes of soybeans since late November 2023, leading to increased domestic production and stocks of Soybean Oil. Notably, Traders, in response to the prevailing market conditions, displayed a distinct reluctance to issue new quotations, reflecting a cautious approach amidst the uncertainty. This hesitancy stemmed from the intricate interplay of supply and demand dynamics. Additionally, external factors such as geopolitical tensions and economic uncertainties contributing to higher freight charges supported by a continued devaluation of Chinese currency further affected the market sentiments. The convergence of these diverse factors created a scenario marked by evident fluctuations and a discernible downturn in the overall trajectory of the market. However, a steady recovery in the prices was witnessed as the market progressed towards the final month of the first quarter of 2024. Rebound in end-user consumption in oil terminals, while competitive oils market such as dropped forecasts of Malaysian palm oil production supported this price trajectory. Furthermore, spurred by biodiesel demand and the strengthening dollar against the Yuan further amplified imports, fuelling March's surge in its prices.
Europe
In the European market, particularly in Ukraine, the first quarter of 2024 witnessed an overall positive trajectorty but saw prices weaken in the first two months. Ukrainian soybean prices, which had surged in demand during autumn, experienced a significant decline in January, largely due to global market conditions.Despite an initial surge in demand, Ukrainian soybeans and their downstream soybean oil prices have experienced a significant drop. This downturn was influenced by the global decline in trading prices of soybean oil, including those from other exporting nations like Brazil. In response, Ukrainian factories have adjusted their strategies by slowing down soybean oil exports to the EU at reduced costs to maintain competitiveness in the market. Additionally, regional purchasing activity for soybean oil decreased due to subdued off-takes from biofuel and other feed industries. The devaluation of the Ukrainian currency against the dollar also made soybean oil more expensive in the regional market in terms of the Euro, further dampening market activity until mid-2024.
However, towards the end of the quarter, the domestic soybean oil market in Ukraine witnessed a significant price increase. The upward price trend in the soybean oil sector started due to price growth in the export market, further supported by increased domestic demand. Moreover, various market participants stated that the border blockages constrained Ukrainian soybean oil exports to Poland, resulting in reduced market supply and adding pressure on domestic prices. Nonetheless, the decrease in border blockages and the resurgence of demand for Ukrainian products fueled the ongoing upward trajectory of soybean oil prices throughout the month. Participants in the soybean oil market see ample inventories amidst a rebound in demand this month. Producers noted increased demand from end-user sectors since March's start, buoyed by rising regional off-takes from biofuel and feed industries maintains a positive trading outlook.
South America
In South America, particularly in Brazil, soybean oil export prices saw a significant decline throughout the quarter, followed by a steady increase in the middle. Starting from January 2024, despite production delays in Brazil, factors such as abundant harvests and uncertain demand drove prices down. Supplies of soybean oil in January were sufficient to meet both regional and overseas demand. However, import demand from Asia slowed before the Lunar New Year, causing significant drops in soybean prices in January, even though Brazil's harvest proceeded at a faster pace than usual. The prices of soybean oil followed the movement of the soybean complex, but a steady upward trend was observed in mid-Q1. This increase was attributed to several factors, including delayed planting seasons due to adverse weather conditions, which disrupted agricultural schedules and created imbalances in supply and demand, which witnessed a steady rise from the importing nations. Additionally, global inflationary pressures led to higher input prices, requiring higher selling prices to maintain profitability supported by higher freight costs. This phenomenon underscores the intricate interplay between macroeconomic factors and agricultural commodities, wherein broader economic trends directly influence pricing dynamics within the agricultural sector. Lastly, towards the end of the first quarter, the soybean market in Brazil experienced sluggish business activity, with moderate commercialization at ports and disagreements between buyers and sellers leading to price declines. Despite increased supplies from recent harvests, strong domestic demand for soybean oil for biodiesel production drove up domestic prices, making Brazilian soybean oil less competitive in the global export market availability compared to producers like Argentina. This, along with suppliers' reluctance to sell amid expected price increases, prompted importing nations to seek alternative options for soybean oil particularly Argentina, significantly impacting supply and demand dynamics.
