Fundamentally Speaking

Soybean Oil Price, Share of Crush Value

Joel Karlin
By  Joel Karlin , DTN Contributing Analyst
Chart by Joel Karlin, DTN Contributing Analyst

Soybean oil, like other CME agricultural commodities, has soared in recent months with nearby prices at their loftiest levels in over eight years, well over the 50-cent per pound region.

Demand and prices for feedstocks from soybean oil to grease and animal fat is soaring based on burgeoning biodiesel consumption at the same time loosened social distancing and business restrictions are beginning to accelerate demand for use of cooking oils at restaurants and other away from home eating establishments.

Meanwhile though production of all vegetable oils will be record high this season, much of that is due to all-time high palm oil output with output of others such as sunseed, rapeseed, peanut, rapeseed and cottonseed all seeing production down this year.

Meanwhile usage is growing even faster resulting in total global vegoil stocks this year at 21.66 million metric tons (mmt), about the lowest in ten years with the stock to use ratio at 10.4%, the lowest here since the 2010/11 season.

This has resulted in soybean oil increasingly taking on a larger share of the combined soybean crush value compared to its co-product soybean meal.

This graphic shows the cumulative percent distribution of central Illinois soybean oil percent of crush value 2000-2021.

The cumulative distribution chart shows the percent of time soybean oil's share of the weekly central Illinois soybean crush margin as reported by the USDA-AMS division has traded above or below a certain level.

The chart shows that 25% of time since 2000 the central Illinois soyoil % of crush margin has been at or below 31.5%, 50% at or below 34.5% and 75% of time since 2000 the central Illinois soybean oil percent of crush value has been at or below 39.8% or just 25% of the time has it exceeded 39.8%.

We note that the latest report pegs the share at 38.8%, highest since 4/26/2012.

Back then the cash central IL soybean oil price was 54.75 cents per pound vs. 52.33 today.


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