In this weekly Commodities Watch column, John T. Barone, president and commodities analyst for Market Vision Inc., offers a snapshot of the state of commodities for restaurants.
Just about all the soybean oil news over the past week has been bearish for prices.
First, the FDA said it would no longer recognize partially hydrogenated vegetable oil as “Generally Recognized as Safe.” Then, the National Oilseed Processors Association pegged October soybean crush at a higher-than-expected 157.1 million bushels. But the big bombshell came on Friday, when the U.S. Environmental Protection Agency proposed reducing its biofuels target by 16 percent for 2014, from 18.15 billion gallons to 15.21 billion gallons. That number includes reducing advanced biofuels (soy oil-based biodiesel and Brazilian sugar-based ethanol) from 3.75 billion gallons to 2.20 billion gallons.
Soy oil futures closed the week at $.4047 per pound and are likely headed lower this week. The corn-based ethanol mandate will also drop from 14.4 billion gallons to roughly 13.0 billion gallons. Corn prices are also low, with futures dropping to $4.22 per bushel on Friday.
Contact John T. Barone at [email protected].