Fundamentally Speaking

Soybean Oil % of Crush Value

Joel Karlin
By  Joel Karlin , DTN Contributing Analyst

Soybean oil continues to be the star of the show rising to new contract highs at expense of soybean meal that is responding negatively towards reports of increasing AFS in China that is calling into question their future feed demand and in process cash soybean oil now accounting for close to 40% of the crush value, highest since spring of 2012.

This chart shows the Central Illinois soybean oil cash price in $/lb. on the right hand axis and soybean oil's percent of the Central Illinois soybean crush value with the average and plus and minus one (blue lines) and two (red lines) standard deviations on the left hand axis.

The latest percent of crush value at 39.3% is the highest since April of 2012 ad is well above the 20-year average of 31.7%.

Over the past 20 years plus this percent has only been above the 37.3% level 16% of time and if things keep on going the way they have the percent crush value accounted for by soybean oil may head to the plus two standard deviation line, a level seen only 2.5% or less of the time since 2000.

Prior to these highs the percent of crush value peaked out at 49.1% back in December of 2011 with cash soybean oil at $0.50 per pound though prices did climb as high as $0.56 per pound in mid-April 2012 while the highest percent of crush value since 2000 appears to have been in May of 2008 at just slightly over 50.0% with soybean oil prices at that time peaking at close to $0.66 per pound around July 4th of 2008.

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