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WASDE forecasts rise in use of soybean oil in biodiesel

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The United States Department of Agriculture (USDA) has increased its 2020/21 forecast for soybean oil use in biodiesel production in its latest World Agricultural Supply and Demand Estimates (WASDE) report, Biodiesel magazine reported on 12 January.

Its forecast for soybean production in 2020/21, however, was down 35M bushels at 4.1bn bushels mainly due to reductions for Minnesota, Iowa and Kansas.

Harvested area was estimated at 33ha a slight increase compared to the December report.

With higher imports and slightly higher beginning stocks, soybean supplies were down 14M bushels from last month. The soybean crush forecast was raised 5M bushels to 2.2bn bushels, reflecting improved prospects for soybean meal exports with a lower export forecast for Argentina.

The soybean export forecast was raised 30M bushels to a record 2.2bn bushels. With lower supplies and increased use, ending stocks were projected at 140M bushels, down 35M bushels from the previous forecast.

The USDA currently predicted 3.7bn kilos (8.2bn pounds) of soyabean oil would go to biodiesel production in 2020-21, up from a forecast of 3.6bn kilos (8.1bn pounds) made in the December WASDE. Around 3.56bn kilos (7.85bn pounds) of soyabean oil went to biodiesel production in 2019-20, down from 3.565bn kilos (7.86bn pounds) in 2018-19.

Soybean and soybean product prices were forecast higher for January. The average US season soybean price for 2020-21 was projected at US$11.15/bushel, up 60 cents as cash prices in central Illinois reached six-year highs.

The soybean production forecast for Argentina was lowered 2M tonnes to 48M tonnes and for Uruguay was reduced by 200,000 tonnes to 2.2M tonnes, reflecting weather conditions in December and early January.

Global soybean stocks were lowered 1.3M tonnes to 84.3M tonnes, with lower stocks for Argentina and the USA that were partly offset by higher stocks for China.

Source: Oils & Fats Intercional (OFI)