Soybean Oil

Soybean oil prices, basis nearest Chicago futures, scored impressive gains during 2002, rallying from under 15 cents/lb early in the year to 18 cents by midyear and over 23 cents towards yearend; the strength reflecting an expected sharp reduction in overall oilseed supplies during 2002/03. The world's supply/demand for soybean oil shows protracted year-to-year gains. World production in 2002/03 of a record high 30 million metric tons compares with the previous year's record of 29.9 million. The U.S., the world's largest bean oil producer, generally accounts for almost a third of total output, producing nearly 50% more than Brazil, the second largest producer. Of the important edible vegetable oils, soybean oil is the world's largest--about 32% in 2002/03-- followed by palm oil and rapeseed oil. World usage of soybean oil in 2002/03 of a record high 30.3 million tons compares with 30 million in 2001/02. World carryover stocks at the end of 2002/03 were estimated at only 2 million tons vs. 2.55 million a year earlier. The U.S. is the world's largest consumer with about a third of the total followed by China with about half the U.S. total: 7.9 million tons and 4.4 million tons in 2002/03, respectively. However, on a percentage basis, China's use has been steadily gaining on the U.S.

Global soybean oil exports in 2002/03 of a record 9.94 million tons compare with the previous year's 9.92 million. Argentina is the largest exporter with 4 million tons in 2002/03. Importing nations are numerous: collectively, Asia is the largest importer followed by the Middle East.

The U.S. soybean oil crop year begins October 1. Production in 2002/03 of 18.8 billion pounds compares with the record high 19 billion in 2001/02. In the mid-1990's, production averaged about 15 billion pounds. The oil content of U.S. soybeans correlates directly with temperatures and sunshine during the soybean pod-filling stages. Carry-in stocks on October 1, 2002 were estimated at 2.4 billion pounds vs. 2.9 billion a year earlier. The U.S. supply for 2002/03 of 21.2 billion pounds compares with 21.8 billion in 2001/02. Total disappearance in 2002/03 of 19.8 billion pounds compares with 19.5 billion in 2001/02. Bean oil stocks were expected to total only 1.4 billion pounds as of September 30, 2003.

Domestic soybean oil use in 2002/03 is forecast at a record high 17.5 billion pounds vs. 16.9 billion in 2001/02, as domestic prices prove competitive to other fats and oils. U.S. exports have shown an irregular trend in recent years: estimated at 2.3 billion pounds in 2002/03 vs. 2.5 billion 2001/02 and the record high 3.1 billion in 1997/98.

Crude soybean oil prices (basis Decatur) in 2001/02 averaged 16.55 cents vs. 14.16 cents in 2000/01. In early 2002/03, prices were averaging over 20 cents/lb.

Futures Markets

Soybean oil futures and options are traded on the Chicago Board of Trade (CBOT).

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

Soybean Oil

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