Soybean Oil Mixed Movements

This week, the soybean oil futures market experienced mixed movements, with some contracts showing gains while others declined. Here’s a summary of the key developments:

Price Movements:

  • Old crop contracts: Soybeans saw spreading, with old crop contracts rising 10 to 16 ¼ cents.
  • New crop contracts: Contracts for the latest crop increased by a penny to 4 ¼ cents.
  • Deferred agreements (2025 and beyond): These contracts saw fractional declines of up to 1 ½ cents.
  • Soymeal futures: Front months were up 30 cents to $4.30/ton, while back months were down 30 to 50 cents.
  • Soy oil futures: Posted 45 to 59 points gains at the close.

Factors Influencing the Market:

  • The weekly NASS Crop Progress report, a significant indicator, revealed a 2% decline in US soybean condition ratings to 70% good/excellent. This deterioration, driven by declines in Illinois, Ontario, and South Dakota, and improvements in Iowa, Nebraska, Ohio, and Missouri, is a crucial factor to consider.
  • Brazilian production: The Brazilian crusher Abiove lowered their soybean crop projection by 1.4 MMT to 152.5 MMT. This is still above the CONAB projection but closer to the USDA estimate.
  • NOPA report: The May crush report from NOPA showed a record for the month, exceeding trade estimates and representing an 8.37% increase from April. Soybean oil stocks were lower than expected, contributing to the strength in front-month soy oil futures.

Additional Notes:

  • Chinese soybean futures at Dalian were up 0.26% on Wednesday while the US market was closed.
  • Weekly Export Inspection data indicated a significant increase in soybean shipments.
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