As the curtains close on 2021, those UK analysts have been reviewing key events of the past year, summarizing what has changed for the oilseeds markets, and which elements are likely to spill over into 2022.
Looking at North America, the experts said the last 12 months for the oilseeds markets have been characterized, not by a fall in production of US soybeans or a surge in demand, as seen in corn markets, but a sharp rise in vegetable oil markets.
Perhaps the greatest impact on global oilseed markets over the past year, they continued, has been the fall in palm oil production in Malaysia, driven by a combination of poor conditions leading to lower yield, but also harvest challenges due to lockdown measures reducing available labor.
“The combination of strong recovery in global demand, and shortfalls in vegetable oil supply pushed Chicago soybean oil up over 60% at its peak, and, entering into December, up over 27% from the start of the year,” they remarked.
Soybean meal trends
Soybean meal prices have been under pressure in 2021: As the oil proportion gained in value, meal prices came under pressure, capping the gain in soybeans.
“With high oil prices, crushing was also incentivized, again adding pressure to meal markets.
“Vegetable oil markets risk coming under pressure in 2022, but this doesn’t mean meal prices will follow this trend.”
La Niña conditions in Argentina pose a real risk to meal supplies globally, cautioned the CRM Agri analysts.
Rapeseed supplies have become increasingly tight over recent years, driven mostly by the shrinking European area, the said.
“Extreme drought conditions in Canada this season have highlighted this globally fragile market,” commented the oilseed supply and demand specialists.
Rapeseed markets are now at the sway of the larger soybean and palm oil markets, they added.
But the future looks rosier.
“While northern hemisphere supply in 2021/22 has suffered, Australia has recorded a record crop at 5.7Mt, somewhat now easing global rapeseed supply. Further ahead, and production next season is widely anticipated to rebound and improve next season.”