Argentine soyoil prices at new highs on global tight oilseed supply

Soybean oil prices in Argentina have surged to fresh multi-year highs on Wednesday boosted by concerns on...

Soybean oil prices in Argentina have surged to fresh multi-year highs on Wednesday boosted by concerns on tight supplies of US soybeans, a slow Brazilian bean harvest, tight volumes of sunoil in Ukraine, and limited availability of rapeseed in Canada.

Soyoil volumes for April shipments from the world’s largest soybean oil exporter were valued at 0.10 ct/lb under the May CBOT contract, equivalent to $1,106.50/mt FOB Up River.

That is up over $100/mt in just a week and is higher than a seven-year high of $1,100/mt FOB set in early January when a month-log strike paralysed the local crushing industry.

“Canola and rapeseed are short, and the replacement is sunflower oil and soybean oil,” an Argentine broker said.

The broker added that the surge in Canadian canola futures to a record high on Tuesday added fuel to the bull run on the rest of the oilseed complex, with CBOT futures continuing to surge to fresh highs on Wednesday.

The April CBOT soybean oil contract was up for its fifth session on Wednesday at 49.21 ct/lb – up over 12% since the start of February and at its highest since June 2013, while the March contract was trading over the 50 ct/lb mark.

Basis premiums for Argentine soyoil over the CBOT, meanwhile, have stayed mostly unchanged over the past week, despite the rally on the futures as soyoil volumes remain in short supply in the world’s number one exporter.

“It remains tight here after the December strikes, plus there is continued SME [soyoil-based biodiesel] demand from Europe,” a second Argentine broker said.

While crushing activities have rebounded to a five-year high in January following a record low grind in December caused by the strikes, Argentina remains well behind its bean crushing pace compared to previous years.

Over the past quarter, Argentina processed just under 7 million mt of soybeans, official data from the Argentine government shows, its smallest pace since 2013 and nearly 1 million mt less than what was crushed over the same three-month period last year.

That means roughly 200,000 mt, or around 2% of annual global soyoil exports, did not arrive on the market.

Meanwhile, demand from India – Argentina’s largest customer and the world’s number one vegoil importer – has dried up as prices surged.

“India is confused. Panic buyers pay up small volumes like they did yesterday for sunoil at $1,465/mt CIF but no major soya bulk trader,” an India-based broker said.

The first Argentine broker said demand from India is “zero” as the import margins there fell to negative $40/mt.

“We will have buyers waiting to cool down unless they have no other choice but to buy but they seem to be speculating,” another Argentine trading source said.

What to read next
The publication of Fastmarkets’ European heavy plate price assessments was delayed by 51 minutes. The prices impacted by the delayed publication were the following: MB-STE-0034 Steel domestic plate 8-40mm, exw Northern Europe, €/tonne MB-STE-0035 Steel domestic plate 8-40mm, exw Southern Europe, €/tonne MB-STE-0049 Steel plate (8-40mm) import, cfr main port Northern Europe, €/tonne MB-STE-0050 Steel plate (8-40mm) import, cfr […]
Explore the latest trends in Nordic timber as companies navigate profitability challenges in the forest industry.
On August 18 the following prices were published incorrectly: MB-ALU-0002 Alumina index, fob Australia, $/tonne was published in error as $369.13 per tonne. This has now been corrected to $369.10 per tonne. MB-ALU-0019 Alumina index inferred, fob Indonesia, $/tonne was published in error as $378.13 per tonne. This has now been corrected to $378.10 per tonne. MB-ALU-0018 Alumina […]
Fastmarkets has corrected the rationale for its MB-AL-0346 Aluminium P1020A premium, in-whs dup Rotterdam, $/tonne that was published incorrectly on Tuesday August 19.
Fastmarkets proposes to launch a new monthly price assessment for green petroleum coke, 1.5% S, in-whs ARA, $/tonne.
Fastmarkets is inviting feedback from the industry on the pricing methodologies for European graphic paper, as part of its announced annual methodology review process.