Soybean oil, also known as soybean oil, is a vegetable oil extracted from the seeds of the soybean plant. It is known to be the second most widely used vegetable oil globally. Like soybeans, soybean oil contracts are also traded in financial markets in the form of futures or options contracts. Naturally, in financial trading, technical analysis is indispensable, but fundamental factors are equally important in determining the factors influencing the long-term price trends of a wide range of assets.

1. U.S. Soybean Production

   
   
   
   

   Increasing soybean production in the U.S. is a concern for most companies. As production increases, the market supply may become excessive, leading to a decrease in soybean oil prices. This can negatively impact the growth of the soybean oil market. Additionally, in the future, if soybean production decreases, soybean oil prices may increase, primarily due to concerns that the supply may not be sufficient to meet demand.

   
   
   
   

2. Alternative Vegetable Oils

   
   

   The availability of other edible oils also affects soybean oil prices, as this reduces dependence on soybean oil and puts pressure on its prices. In other words, if for some reason the production of major edible oils like corn oil, coconut oil, and palm oil decreases, soybean oil is likely to benefit from this situation due to increased demand.

   
   
   
   

3. U.S. Export Data

   
   
   
   

   Export data often indicates issues related to inventory levels. When soybean exports increase, inventories are likely to decrease. This raises concerns that the available soybeans may not be enough to produce sufficient soybean oil to meet U.S. demand, thereby driving up soybean oil prices. Conversely, if exports decrease, soybean oil prices may fall due to expectations of an oversupplied market.

   
   
   
   

4. Climate Impact

   
   
   
   

   Essentially, if soybean production is affected by any factor, oil prices will also be affected. Climate is one such factor. Soybean cultivation requires hot summers, with temperatures ranging from 20 to 30 °C. However, temperatures below 20 °C or above 40 °C can stunt plant growth. If there is any fluctuation in temperature or climate, soybean oil prices tend to fluctuate accordingly.

   
   
   
   

5. Fuel Prices in the U.S.

   
   
   
   

   Fuel prices are one of the important factors affecting soybean oil prices. If fuel prices increase, production costs will rise, forcing soybean oil prices to increase. However, this is not a reliable measure to predict that lower fuel prices will automatically lead to a decrease in soybean oil prices in the U.S. or any region worldwide. Therefore, producers need to monitor the market and adapt with the best actions to maximize profits.

   
   

According to SpendEdge.