This continues to be a soybean oil led rally which is unusual and a testament to the burgeoning use of soybean oil and other vegetable oils for biodiesel purposes and restaurant usage as food consumption at away from home eating establishments continues to recover.
This chart shows world total oilseed and soybean stocks-to-use ratios on the left-hand axis vs. the total world vegetable oil and soybean oil stocks-to-use ratios on the right-hand axis.
USDA is looking for a slight increase in both the total global oilseed and world soybean ratios for the coming year, although from the lowest levels since the 2013/14 season.
Note however that this is not the case for the world vegetable oil situation where the stocks-to-use ratio for the coming year at 10.46% is the lowest since the 2010/11 season.
While palm oil is the largest produced vegetable oil as opposed to soybeans which is the largest produced oilseed and soybean meal which is the largest produced protein meal its stocks-to-use ratio at 15.27% will be the lowest since the 2015/16 season.
The real key for soybean oil to continue to drive soybean crush margins is the fact that the forecasted 2021/22 global soybean oil stocks-to-use ratio even with record production is seen falling to 6.61% this season, off from this year's 7.47% to apparently the lowest levels ever.
This may be of benefit to protein meal end-users as high oil prices imply a robust processing pace that should result in heavy soybean meal production and perhaps lower prices if 2021 U.S. soybean production surprises on the upside.
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