Soybean Oil Rallies Yet Exporters Struggle Without China Deals
Bertrand Oesterle, StoneX VP of Clearing and Execution Sales, shares insights on recent movements in soybean oil, corn, and wheat, along with the challenges facing global grain markets.
Key Takeaways
EPA refinery exemptions boosted soybean oil and biofuel demand
US crops remain strong but exports lag without China deals
Wheat and corn markets show mixed signals across regions
Soybean Oil and the EPA Decision
Oesterle explained that soybean oil surged following the EPA’s review of refinery exemptions, which signalled more oil heading into biofuels. The move pushed futures higher, though energy markets later pressured prices. Soybean oil also supported soybean and corn for a time as speculative shorts adjusted.
US Crop Conditions and Exports
Soybean conditions improved, with 69% rated good to excellent, above the five-year average. However, exports remain worrisome as China has not resumed buying. Oesterle noted that “there’s still no export to China… it is the big worry”. Brazilian soybeans continue to dominate Chinese imports, leaving US exporters in a difficult position.
Rapeseed, Canola, and Corn
Rapeseed and canola markets reacted to the EPA decision, but Canada’s crop faced heavy pressure from Chinese duties. In corn, US yields remain strong, though Europe faces drought damage and weaker output. Brazil’s safrinha harvest is complete, with new planting underway, while Argentina prepares for a large acreage season.
Wheat and Regional Dynamics
Wheat markets, especially in Paris, have shown signs of support from farmer retention and export contracts. Still, speculative short positions remain heavy. Russia continues to increase production estimates, while Ukraine’s harvest yielded around 21 million tons, about half of milling quality. Oesterle concluded that the months ahead will be shaped by US export challenges, Chinese trade uncertainty, and regional production variances across Europe and South America.
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---- Expert: Bertrand Oesterle, StoneX VP of Clearing and Execution Sales
Grains & Oilseeds
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