Maybe The US Needs Bean Oil Exports More Than I Thought

Here’s a little more color on the canola oil imports vs bean oil exports topic, and a chart that tells the story…

Bean oil has traded at or below palm oil since about May of this year, encouraging exports in style. Bean oil exports could be the most dynamic # to watch in USDA’s WASDE this week.

The export story has a lot to do with increased US bean crush. But don’t sleep on the impact of Canadian canola.
·       The US receives 95% of Canada’s canola oil exports.
·       Canada’s biggest seed export destination, China, is threatening to curtail purchases due to an electric car trade spat. They are a ~5 Mil MT buyer of Canada’s ~18 Mil MT crop.
·       Multiple new plants are coming online currently and in 2025. The US is the clear destination for that oil production.

The attached chart tells the story. The increase in canola imports plus bean oil production has outpaced exports to the tune of over 500k MT since May, AFTER bean oil got “cheap”.

I estimated Nov & Dec canola imports at 300k tons/mth to match October to round out this chart.

If that pace continues, JFM imports plus crush increases will add ~100k mt/mth veg oil supply vs JFM of 2024. Roughly HALF of that growth will come from Canadian canola!

Dec bean oil exports were finally over 100k mt for the first time in a long time. With no good news materializing on the biofuel front, we need continued exports to clear nearby stocks.

With constructive movement on 45Z or some sort of import duty regime, this thing can turn on a dime.  But that is an IF, not a when.  Until then…..

What am I missing???