Argentina soybean oil gains as Brazil premium narrows amid fresh supply data

South American soybean oil markets diverged in the week to Sept. 15, with Argentine FOB values strengthening despite a modest decline in Chicago Board of Trade soybean oil futures, while Brazilian prices softened and the premium for Brazilian oil over Argentina narrowed sharply.

CBOT October soybean oil futures settled at 69.88 cents/lb Sept. 15, down 0.34 cent/lb, or 0.48%, from 70.22 cents/lb Sept. 8. Futures were volatile during the period, reaching 71.41 cents/lb Sept. 10 before falling 3.11% Sept. 11 following the release of the US Department of Agriculture's September Crop Production and World Agricultural Supply and Demand Estimates reports.

USDA raised its 2026 US soybean production estimate to 4.535 billion bushels, with yield projected at 52.8 bushels/acre. Despite the larger crop estimate, USDA lowered projected 2026/27 US soybean ending stocks by 10 million bushels to 310 million bushels after raising projected exports by the same amount.

Fresh US processing data provided another fundamental input Sept. 15. The National Oilseed Processors Association reported its members crushed 205.46 million bushels of soybeans in August, below market expectations of 211.55 million bushels. The crush was 8.24% above the year-earlier level but 5.17% below July.

NOPA reported soybean oil stocks at 1.201 billion lb, below market expectations of 1.257 billion lb and 3.5% below the year-earlier level, providing a fresh indication of US soybean oil availability as the market moves into the new-crop harvest.

In Brazil, national agricultural supply agency Conab estimated the country's soybean crop at 180.4 million mt in its Sept. 15 report, down 60,000 mt from its previous estimate. Conab's initial projection for the 2026/27 soybean crop was 181.64 million mt, compared with USDA's current projection of 186 million mt.

Argentina strengthens relative to Brazil

Against the slightly weaker weekly CBOT backdrop, Argentine export differentials strengthened.

Platts, part of S&P Global Energy, assessed Argentine soybean oil FOB Up River for October loading at $1,223.13/mt Sept. 15, up $5.74/mt, or 0.47%, from $1,217.39/mt Sept. 8.

The October Up River basis strengthened 60 points over the period to minus 1,440 points against CBOT October futures, from minus 1,500 points. The stronger differential more than offset the decline in the underlying futures contract, allowing Argentine outright prices to rise.

Brazil moved in the opposite direction. Platts assessed Brazilian soybean oil FOB Paranaguá for October loading at $1,227.53/mt Sept. 15, down $7.50/mt, or 0.61%, from $1,235.03/mt Sept. 8. The October basis ended the period unchanged at minus 1,420 points against CBOT October futures.

The divergence narrowed Brazil's October premium over Argentina sharply to $4.40/mt from $17.64/mt Sept. 8. The spread between the two origins' October basis levels similarly narrowed to just 20 points from 80 points.

Brazil's November market also weakened, with FOB Paranaguá falling $5.51/mt, or 0.45%, to $1,224.67/mt. The November basis strengthened 10 points over the period to minus 1,480 points against CBOT December futures.

The Sept. 8-15 period therefore showed greater relative firmness in Argentine soybean oil, with stronger Up River basis supporting outright prices even as CBOT declined. Brazilian prices moved lower and converged toward Argentina, substantially reducing the premium that had characterized the Brazilian market a week earlier.