Soybean Oil Market Comments – 04/25/2022

Soybean oil values hit new all time highs last week on news Indonesia, the world’s biggest palm oil exporter, would restrict palm oil export sales to limit domestic food inflation. 

The three year bull market  in soybean  oil has resulted in major changes in the soybean crush industry. Soybean oil now accounts for nearly half of US soybean crushers revenue. Rising soybean oil vales has had a negative impact on soybean meal, although meal prices were able to keep up this winter due to the weather market and short soybean crop in South America. Soybean meal and oil  values trend together when the raw product supply is threatened, but are negatively correlated as they compete to support the crush pace.

The runup in soybean oil values has the soybean crush margin holding above $4.00  per bushel which is more than double the rate prevailing in the pre 2020 period. The extra wide margin provides a cushion for soybean prices as the market becomes more focused on US  soybean crop developments this summer.