Soybean oil
Soybean oil
Price movements (monthly)
Soybean Oil FCA Netherlands (EBP)
Month-on-month Change
Year-on-year Change
- The Expana Benchmark Prices (EBP) for Soybean Oil FCA Netherlands declined by 1.3% month-on-month (m-o-m) as of July 31, driven by limited demand during the month.
- European Union soybean imports for the 2025/26 season, which began in July ‘25, reached 0.97 million metric tonnes (mt) as of August 3; down 26% year-on-year (y-o-y). Market players believe the most likely cause for sluggish imports since the beginning of the marketing year would be lower crush margins.
- On the US futures market, the average CBOT soybean price declined by 3.8% m-o-m, due to weak demand for US-origin beans. Meanwhile, the soybean oil price climbed by 9.5% m-o-m in July supported by increasing domestic demand from the biodiesel industry. The market continues to be driven by tariff uncertainties.
Soybean oil
Price drivers
↓ Macroeconomic Environment
The average Brent crude oil price decreased marginally by 0.6% m-o-m in July to $69.42/barrel. Throughout July, crude oil prices moved mainly sideways. The sideways trend as largely attributable to increased demand in the form of markedly higher m-o-m imports by China.
However, the higher import figures were balanced by OPEC output hikes, which added more supply to the global market.
EU gas prices fell by 7.5% m-o-m in July to €33.9/MWh. Prices in the EU fell markedly throughout July in line with storage build and lower cooling demand following a decline in temperatures across the continent.
→ Vegetable Oil Substitution
Developments in how the main vegetable oil (rapeseed oil, palm oil, sunflower oil and soybean oil) markets will respond to US President Trump’s policy/tariffs will need to be closely watched for vegetable oil impacts.
↓ Logistics
The shipping 40ft container composite fell by 21% m-o-m and 55% y-o-y to $2,651 per unit in July.
The bulk of container loading already took place in April–June in anticipation of tariff increases, so demand for transportation declined in July. The peak season turned out to be short and weak, especially for small and medium sized businesses, which are not prepared to pay higher duties. Despite seasonal growth on routes to Europe and the Mediterranean, excess capacity and logistical restructuring led to a decline in rates from June peaks.
Soybean oil
Price forecast
Fundamentally, soybean oil prices are deemed to be fair, but the overall fundamentals are becoming more bullish, which is evidenced by the fact that the fair band is increasing. This puts upward pressure on the price of soybean oil. Looking at the typical seasonal fluctuations of soybean oil prices, we often see an overall decline into Q3, which puts downward pressure on prices in the coming months.
The technical analysis does warn of further price increases. The long-term chart is of particular concern, as prices have entered a one to three-year uptrend. Taking the low of December 2024 as a starting point, this would imply higher prices throughout 2025 at a minimum, and more likely for even longer. We have managed to mitigate this initial risk with a number of hedges, but at current prices, hedging over a longer time frame is less likely to be beneficial. There are likely to be further opportunities to hedge if this long-term uptrend continues, and these are opportunities we will be looking out for.
Soybean oil
Market sentiment (for the month ahead)
Mildly Bearish
Market players note the ample supply in the global plastics market, which can more than cater to sluggish demand. Sources do not expect these dynamics to change imminently.
↓ Increasing Supply
Despite the poor demand environment, production levels remain robust globally. The ample availability comes against the backdrop of production outages at certain facilities in the US. Sources noted that international trade between the US and the EU may increase in the coming months following the signing of a trade deal between the two economies, with EU exports of plastics capped at a 15% tariff.
→ Muted Demand
According to market sources, consumer demand is not showing any signs of rising, even during the seasonally higher summertime, when the use of plastic bottles tends to increase. Additionally, longer-term orders are sluggish due to many players being out for the summer holidays. Participants reported that this lack of demand is especially visible in the LDPE, HDPE, and PP markets.
→ Mixed Production Costs
Like last month, production costs remain mixed. Ethylene prices trended strongly upward throughout July to cater for demand from the LDPE and HDPE segments. However, the propylene market remains depressed on tepid demand.
↑ US Weather-Related Concerns
In the US, market sources are increasingly concerned about the prospect of weather-related production outages due to the hurricane season. So far, players have reported a quiet season with little damage but remain vigilant of any future storms.
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