WASDE maintains forecast for soybean oil use in biodiesel

The USDA maintained its 2020-’21 forecast for soybean oil use in biodiesel production in its latest World Agricultural Supply and Demand Estimates report, released Nov. 10. The agency lowered its 2020-’21 projections for soybean production and ending stocks.

Soybean production is forecast at 4.17 billion bushels in 2020-’21, down 89 million on lower yields. Lower yields are reported for several producing states, including Illinois, Iowa, India, Ohio and Nebraska. With reduced production, soybean ending stocks are projected at 190 million bushels, down 100 million from last month. If realized, soybean ending stocks would be at the lowest level in the past seven years.

Soybean and product prices for 2020-’21 have been revised up. The U.S. season-average soybean price for 2020-’21 is forecast at $10.40 per bushel, up 60 cents. The soybean meal price is forecast at $355 per short ton, up $20. The soybean oil price is forecast at 34.5 cents per pound, up 2 cents from last month.

An estimated 8.1 billion pounds of soybean oil is expected to go to biodiesel production in 2020-’21, an estimate that was maintained from the October WASDE. Approximately 7.9 billion pounds of soybean oil went to biodiesel production in 2019-’20, with 7.863 billion pounds being used to produce biodiesel in 2018-’19.

The 2020-’21 foreign oilseed supply and demand forecasts include lower production and crush, resulting in lower exports of oilseed meals and vegetable oil. Foreign oilseed production is lowered 5.6 million tons to 473.3 million, mainly on lower soybean crops for Argentina and India and lower sunflower seed production for Ukraine and Russia. Yields are reduced for Ukraine and Russia on dry weather conditions during the season and recent harvest results. Argentina’s soybean production is lowered as economic uncertainty reduces area expansion. Crop reductions result in lower exports of soybean and sunflower seed meal and oil. Foreign oilseed stocks are increased slightly as lower cottonseed, sunflower seed, and peanut stocks are offset by higher soybean stocks. Foreign soybean stocks are increased mainly on 2019-’20 revisions to imports and crush for China and Argentina, respectively.