A new FDA qualified health claim states that oils high in oleic acid, such as high oleic soybean oil, may reduce the risk of coronary heart disease.
As the trade dispute with China accelerates, and a very good and slightly early 2018 soybean crop has become virtually assured, both soybeans and crude soybean oil futures…
To some extent, soybean oil is a residual commodity, secondary to soybean meal, in driving processing rates and influencing complex prices. Crush rates are driven primarily…
On April 4, 2018, soybean futures quotes suffered a highly volatile day upon China’s announcement of import tariffs on U.S. soybeans. Soybean futures dropped…
In late October, the U.S. Environmental Protection Agency’s (EPA) decided not to move forward with reducing the biomass-based diesel and advanced biofuel requirements…
Global approval will advance the growth of U.S.-grown high oleic soybeans, leading to an ample supply for the food industry.
The October 2017 update focused on the Environmental Protection Agency’s (EPA) notification of reducing the biomass-based diesel and on the advanced biofuel volume…
The latest projection released by the United States Department of Agriculture (USDA) promises a plentiful supply of soybeans through 2018 and projections show…
Food manufacturers can promote eligible soybean oil products as U.S. grown and now, heart healthy.
The Chinese Ministry of Agriculture recently granted approval for the import and food and feed use of Monsanto’s MON 87705 soybean, farmers will have access to this…
A new AHA Presidential Advisory reviews and examines the scientific evidence supporting this longstanding recommendation to decrease saturated fat intake, and increase polyunsaturated and monounsaturated fat intake to…
While the mechanism behind the ability of soy protein to lower cholesterol levels in humans remains elusive, it has been observed that soyfoods can help to lower cholesterol levels by replacing…
High oleic soybean oil and shortening is now available to food companies.
High oleic soybean oils set to hit the marketplace in a big way.
Keep up-to-date with the latest QUALISOY and U.S. Soy news.
As the trade dispute with China accelerates, and a very good and slightly early 2018 soybean crop has become virtually assured, both soybeans and crude soybean oil futures have been in a general decline. Soybean futures prices are off nearly 25 percent and soybean oil futures are off over 15 percent from May. However, refined, bleached and deodorized (RBD) soybean oil prices in the spot cash market are off a mere $0.01 per pound. The last three months of 2018 are quoted a bit lower, but just about $0.03 below the spot quotes.1
A driving factor is the premium for canola oil versus soybean oil, which stands at a fairly wide $0.06 per pound. Canola crushing margins are currently very poor, while soybean crushing margins are excellent; this is the result of soybean oil futures’ share of the soybean value being at the low end of the long-term range. Most recently, the oil share has been running about 30 percent versus the long-term range of generally 30 to 40 percent. As recently as 2011, the oil share of soybean product value was regularly at 45 percent. With oil share persistently around 30 percent, the canola/soybean oil price spread tends to favor canola. 1
Another factor in strong refined soybean oil prices is the increasing production of renewable diesel. Most biodiesel is produced by blending soy methyl ester with petroleum diesel in various proportions. In recent years, however, a number of petroleum refineries have added a process that allows RBD soybean oil to be refined with crude petroleum to produce biodiesel within the petroleum refining process. This is referred to as “renewable diesel.” In addition to being an economical way to meet the required volume obligations under the Environmental Protection Agency’s (EPA) biodiesel mandate, the current price spread between crude petroleum and soybean oil makes biodiesel more economical to produce than petroleum diesel.2
While crude soybean oil futures prices continue to set the starting point for refined oil prices over the upcoming crop year, look for the trend in soybean oil share of soybean product value and the spread between soybean oil prices and crude petroleum prices to contribute to record or near-record soybean oil refining premiums to keep RBD soybean oil prices firm.
Trade issues with China, America’s number one soybean export destination, continue to weigh on soybean futures prices, and this has been further impacted by what the United States Department of Agriculture (USDA) projects to be a record 2018 soybean crop. The crop is maturing early and preliminary yields seem to be even greater than expected. In late September, soybean futures made a 10-year low at $8.12 per bushel.3
This has in turn put a great deal of pressure on all vegetable oil prices, including soybean oil. Spot RBD was quoted at $0.37 per pound at the end of May, and traders report that this position is buyable today at approximately $0.36 per pound. 3
The USDA reports issued on July 12 showed the undeniable influence of the trade conflict on the projections for marketing year 2018-19, with the following key points:
The net result for the soybean oil trade is that soybean oil stocks are now forecast to grow from 1,711 million pounds at the end of 2017 to 2,316 million pounds in September 2018, and remain somewhat heavy at 2,236 in September 2019. As a result of all of these dynamics, crude soybean oil at crushing plants is projected by USDA to cost $0.30 to $0.34 this year and $0.28 to $0.32 next year.3
1. CME Soybean Futures Quotes, http://www.cmegroup.com/trading/agricultural/grain-and-oilseed/soybean_quotes_globex.html
2. “The Complex Dynamics of Coprocessing.” Biodiesel Magazine, 2018. http://www.biodieselmagazine.com/articles/2516478/the-complex-dynamics-of-coprocessing
3. USDA World Agricultural Supply Demand Estimates, http://usda.mannlib.cornell.edu/usda/waob/wasde//2010s/2018/wasde-07-12-i’2018.pdf
4. Foreign Agricultural Service, https://apps.fas.usda.gov/gats/default.aspx
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