USDA predicts increase in soybean oil use for biofuel

The USDA predicts the 2021-’22 outlook for U.S. soybeans is for lower supplies, lower exports, higher crush and higher ending stocks, according to the agency’s latest World Agricultural Supply and Demand Estimates report, released May 12. The use of soybean oil for biofuel production is forecast higher.

The soybean crop is projected at 4.4 billion bushels, up 270 million from last year on increased harvested area and trend yields. With lower beginning stocks, soybean supplies are projected down 3 percent from 2020-’21. Total U.S. oilseed production for 2021-’22 is forecast at 130.3 million tons, up 7.9 million from 2020-’21.

The U.S. soybean crush for 2021-’22 is projected at 2.2 billion bushels, up 35 million from the 2020-’21 forecast, reflecting favorable crush margins. The USDA said soybean oil is expected to hold a higher share of the crush value as prices are buoyed by increased use of soybean oil as a feedstock in an expanding renewable diesel industry. The May WASDE marks a change in the USDA’s biofuel forecast, as “biodiesel” is relaced by “biofuel” and will now include projected soybean oil use for both biodiesel and renewable diesel as reported in the U.S. Energy Information Administration’s Monthly Biofuels Capacity and Feedstocks Update, which has replaced the EIA’s Monthly Biodiesel Production Report. The USDA said its prior year estimates for renewable fuel are based on data from the U.S. EPA, the California Air Resources Board, and capacity information from industry.

The USDA currently predicts 12 billion pounds of soybean oil will go to biofuel production in 2021-’22, up from 9.5 billion pounds in 2020-’21 and 8.658 billion pounds in 2019-’20.

U.S. soybean exports are forecast at 2.1 billion bushels for 2021-’22, down 205 million bushels from 2020-’21. With lower soybean supplies and higher crush, the U.S. export share of global soybean trade is expected to decline to 33 percent from 36 percent in 2020-’21. U.S. soybean ending stocks for 2021-’22 are projected at 140 million bushels, up 20 million bushels from the 2020-’21 forecast. With prices for fall delivery above $14 per bushel in some locations, the 2021-’22 U.S. season-average soybean price is projected at $13.85 per bushel, up $2.60 from 2020-’21. Soybean meal prices are forecast at $400 per short ton, down $5 from the revised forecast for 2020-’21. Soybean oil prices are forecast at 65 cents per pound, up 10 cents from the revised 2020-’21 forecast.

Globally, soybean production is forecast up 22.6 million tons to 385.5 million. Brazil’s crop is forecast at a record 144 million tons while Argentina’s crop rises 5 million tons to 52 million.

Global soybean exports are expected to increase 1 percent to 172.9 million tons. The U.S. share of global exports is forecast to decline while Brazil’s share increases from 50 percent in 2020-’21 to 54 percent in 2021-’22. China’s imports are forecast to increase 3 million tons to 103 million. Global soybean ending stocks are projected at 91.1 million tons, up 4.6 million, with most of the increase in China and Brazil.