What drives prices: World oil/fat supply & demand (stock to use ratio) Substitution (Lowest cost oil Vs Intrinsic Use) Feed Energy Costs (Floor price fat Vs Grain) Logistics (Freight rates, shipping delays etc) World move to “Just In Time” (JIT) Politics – Import tariffs/duties Biosecurity – BSE, Non GM Markets Biodiesel & Biomas
The bottom line: Import Parity Vs Export Parity Increase demand domestically for feedstock and the price will increase to an import parity level. Eg Rapeseed Oil Price 5yrs ago in EU was US$20 premium to Sth American Soy today it is trading at US$200 premium.
World Oilseed Production
World Vegetable Oil Production
CBOT Soyoil Price (Monthly) US Cents per lb Eg 25 cents * = US$551.16