US Soybean Oil Prices Showcase an Oscillating Momentum

KANSAS USA: The price of Soybean Oil is fluctuating in Kansas (USA), backed by production, which remains uncertain with various global circumstances like rising food inflation due to the Russia-Ukraine war. According to the US Department of Agriculture's August Crop Production report, there is record-breaking Soybean production, which is up from 2021 and far above normal market projections. The USDA also predicts that the average Soybean yield per harvested acre will reach a record-high level, up 1% to 2% from 2021.

 It is observed that the crop improved in the eastern Corn Belt based on a recent analysis done by Agriculture Department. USDA evaluated the Soybean Crop in the major growing states as being approximately 58% good to excellent as of August 14 compared to 57% a year ago in its weekly Crop Progress report. The crop was almost 75% of the way through the critical stage of pod-setting, which determines production potential.

The crush margin stands out in the soy complex and has recently attracted much attention. The amount of Soybean Oil produced has been significantly more than average for some time, but as demand for domestic and foreign use has increased, Soybean meal futures have skyrocketed.

In August, the USDA reported a private transaction of Soybean meal and cake for transportation to Mexico. Additionally, In August, Soybean futures hit a new contract high before it expired, showing that margins were sufficient on the backend to support solid prices on the front end. Meanwhile, nearby Soybean meal futures are also trading at multi-year highs.

As the world's top Soybean importer, China's ailing economy may impact prices. China's economy will take some time to recover, perhaps at least six months, especially if they continue to enforce their zero-COVID policy, which is bad for long-term demand.

According to the ChemAnalyst database, the USA has partially attained ease on market norms after six months of active market dynamics. Unless hostilities escalate, we don't anticipate significant price movements associated with the conflict.