2/18 – In the delayed Grain Stocks Report, the USDA raised 2018/19 soybean oil output due to increased crush and a higher oil extraction rate. Combine that with a year-over-year drop in exports, and 2018/19 year-ending stocks are forecast to jump from 1.99B to 2.10B lbs. This is bearish for soy-oil prices. The USDA is currently projecting 2018/19 soy-oil at $.30/lb, virtually unchanged from $.3004 in 2017/18. However, China did announce it would begin buying U.S. soybeans, as a gesture toward reconciling the trade dispute. According to Macquarie Bank’s commodity group, soy-oil futures reached a long-term cyclical low at $.2688/lb on Sept 21 and have been creeping slowly higher ever since. Soy-oil averaged $.2823 in the 2nd half of 2018 and is $.2938 YTD in 2019. The next cyclical move will eventually be up – but so far 1st half 2019 is looking flat/stable.