Market Overview: Soybean Oil (BO)

Soybean Meal and Soybean Oil are by-products of Soybean processing. Though these commodities are not annually produced, we have chosen to include the Soybean Bean products with Soybeans, due to the relationship between Soybeans and its products.

After Soybeans are harvested, the bulk of the crop is sold to processors, also called crushers, because of the old practice of using a mechanical press to separate (or crush) the oil and meal contents from the Soybean. Today most processors use chemical methods of extraction, which is more efficient. Each bushel of Soybeans produces 11 pounds of Soybean Oil and 48 pounds of Soybean Meal.

Seasonal Overview:

Soybean Oil prices tend to be the strongest from January through April, as supply can be regulated by the processors and competing products (Palm Oil) are in short supply. During the late Spring through Fall months, Bean Oil prices tend toward weakness as competing products supplies are large and the U.S. Soybean Harvest tends to weigh on prices.

Soybean Oil: (High: Apr-May//Low: Aug-Oct or Dec-Jan) With a number not only of food and industrial applications but also of competitors, soyoil follows a contrasting pattern. Market mostly ignores "February Break" in a consistent rise from year end into early May peak. Once its decline begins, market finds little support -- other than occasional weather rallies -- as competitors become increasingly available.

Chart courtesy of Moore Research Center, Inc.