Soybean Oil

Soybean oil is the natural oil extracted from whole soybeans. Typically, about 19% of a soybean’s weight can be extracted as crude soybean oil. The oil content of U.S. soybeans correlates directly with the temperatures and amount of sunshine during the soybean pod-filling stages. Edible products produced with soybean oil include cooking and salad oils, shortening, and margarine. Soybean oil is the most widely used cooking oil in the U.S. It accounts for 80% of margarine production and for more than 75% of total U.S. consumer vegetable fat and oil consumption. Soy oil is cholesterol-free and high in polyunsaturated fat. Soy oil is also used to produce inedible products such as paints, varnish, resins, and plastics. Of the edible vegetable oils, soy oil is the world's largest at about 32%, followed by palm oil and rapeseed oil. Soybean oil futures and options are traded on the Chicago Board of Trade (CBOT).

Prices – Soybean oil futures prices at the Chicago Board of Trade in 2010 traded sideways early in the year. However, soybean oil futures prices then rallied sharply during the remainder of the year to close 2010 up 43% at 57.74 cents per pound.

Regarding cash prices, for the year 2010-11 (through December 2010), the average monthly price of crude domestic soybean oil (in tank cars) in Decatur (F.O.B.) rose sharply by +37.0% yr/yr to 49.25 cents per pound.

Supply – World production of soybean oil in 2010-11 rose +8.0% yr/yr to a new record high of 41.874 million metric tons. The U.S. accounts for 20.6% of world soybean oil production, while Brazil accounts for 15.8%, and the European Union accounts for 5.8%. U.S. production of soybean oil in 2010-11 fell -3.1% yr/yr to 19.000 billion pounds.

Demand – World consumption of soybean oil in 2010-11 rose +9.2% yr/yr to a new record high of 41.804 million metric tons. The U.S. accounted for 18.6% of world consumption, while Brazil accounted for 12.4%, India for 6.9% and the European Union for 6.4%,. U.S. consumption of soybean oil in 2010-11 rose +7.8% yr/yr to 17.100 billion pounds.

Trade – World exports of soybean oil in 2010-11 rose +5.8% yr/yr to 9.567 million metric tons. U.S. exports of soybean oil in 2010-11 fell 16.6% yr/yr to 2.800 billion pounds, down from last years record high of 3.357 billion pounds.

Excerpted from the CRB Commodity Yearbook. For more information on CRB products click here