USDA reduces 2021-’22 forecast for soybean oil use in biofuel

The USDA lowered its forecast for 2021-’22 soybean oil use in biofuel in its latest World Agricultural Supply and Demand Estimates report, released Sept. 10. The forecast for 2020-’21 soybean oil use in biofuel was also revised down.

According to USDA, U.S. soybean supply and use changes for 2021-’22 include higher beginning stocks, production, exports, ending stocks and lower crush. Higher beginning stocks reflect a lower crush forecast for 2020-’21.

Soybean production is projected at 4.4 billion bushels, up 35 million with lower harvested area more than offset by a higher yield forecast of 50.6 bushels per acre. Harvested area is down 300,000 from the August forecast.

Soybean crush is reduced 25 million bushels reflecting a lower forecast for domestic soybean meal disappearance. The soybean export forecast is raised 35 million bushels on increased supplies and power prices. Ending stocks are projected at 185 million bushels, up 30 million from last month.

The USDA currently predicts 11 billion pounds of soybean oil will go to biofuel production in 2021-’22, down from the August forecast of 11.5 billion pounds. The agency also revised down its forecast for 2020-’21 soybean oil use in biofuel to 8.8 billion pounds, down from a 9.1 billion pound forecast made last month.

Soybean and soybean meal prices for 2021-‘22 are reduced from the previous forecasts. The U.S. season-average soybean price is forecast at $12.90 per bushel, down 80 cents. The soybean meal price is forecast at $360 per short ton, down 25 dollars. The soybean oil price forecast is unchanged at 65 cents per pound.

The 2021-‘22 foreign oilseed supply and demand forecasts include higher beginning stocks and lower production, exports, and crush. Foreign oilseed production is lowered 1.5 million tons to 499.8 million mainly on lower canola production for Canada and the EU. Partly offsetting is higher canola output for Australia and higher peanut production for India. Canada’s canola crop is lowered 2.0 million tons to 14 million, reflecting recent government reports.

Lower canola supplies for Canada leads to lower exports of the oilseed and products to the EU, China, and the U.S. Lower global rapeseed supply is offset by increased soybean beginning stocks, mainly driven by higher-than-expected 2020-‘21 imports for China. Higher beginning stocks for China and higher U.S. ending stocks account for most of the global 2021-‘22 soybean ending stocks increase, which are raised 2.7 million tons to 98.9 million. Another notable oilseed change includes higher soybean meal imports for India as the government allows shipments of soybean meal made from genetically modified soybeans through Oct. 31.