USDA increases forecast for 2020-’21 soybean oil use in biodiesel

The USDA reduced its forecast for 2020-’21 soybean production in the latest World Agricultural Supply and Demand Estimates report, released Oct. 9. The forecast for soybean oil use in biodiesel production, however, was increased slightly.

According to the USDA, soybean production is forecast at 4.3 billion bushels, down 45 million on lower harvested area. Harvested area is reduced 700,000 acres to 82.3 million, with reductions for Kansas, North Dakota and South Dakota.

The soybean yield is projected at 51.9 million bushels per acre, unchanged from the September forecast. Soybean supplies for 2020-21 are forecast at 4.8 billion bushels, down 96 million on lower production and beginning stocks.  

Despite reduced supplies, soybean exports are raised 75 million bushels on record early-season sales. With smaller supplies and increased exports, ending stocks are projected at 290 million bushels, down 170 million from last month.

Approximately 8.1 billion pounds of soybean oil is expected to go to biodiesel production in 2020-21, up from a projection of 8 billion pounds made last month. According to the USDA, 7.85 billion pounds of soybean oil went to biodiesel production in 2019-’21, while 7.863 billion pounds were used to produce biodiesel in 2018-’19.

The U.S. season-average soybean price for 2020-’21 is forecast at $9.80 per bushel, up 55 cents reflecting smaller supplies and higher exports. The soybean meal price is forecast at $335 per short ton, up $20. The soybean oil price forecast as raised 0.5 cents to 32.5 cents per pound.

The 2020-’21 foreign soybean supply and demand forecasts include lower beginning stocks, higher crush, and lower ending stocks. Beginning stocks are lowered mainly on higher 2019-’20 crush for China that is partly offset by lower exports and higher stocks for Brazil. The 2020-’21 soybean imports, crush and meal consumption are higher for China, Bangladesh, Thailand, and Vietnam, aligning with prior year increases in domestic meal use. Argentina’s exports are lowered 500,000 tons due to stronger competition from the U.S. With lower supplies in the U.S. and higher foreign use, global ending stocks are reduced 2.9 million tons to 88.7 million.