USDA WASDE lowers forecast for soybean oil use in biofuel

The USDA decreased its forecast for soybean oil use in biofuel production in its latest World Agricultural Demand and Supply Estimates report, released March 9. The agency is also predicting higher soybean prices, lower production and higher exports.

U.S. soybean supply and use changes for 2021-’22 include higher exports and lower ending stocks compared with the February WASDE. Soybean exports are raised 40 million bushels to 2.09 billion with lower production and reduced exports for South America. Soybean ending stocks are projected at 285 million bushels, down 40 million from last month.

With rising soybean prices, the USDA said the 2021-‘22 forecast for soybean oil use in biofuel now at 10.7 billion pounds, down 300 million pounds when compared to February’s forecast of 11 billion pounds. An estimated 8.85 billion pounds of soybean oil went to biofuel production in 2020-’21, up from 8.658 billion pounds in 2019-’20.

The agency has also increased its forecast for soybean oil exports in response to reduced global sunflower-seed oil trade and tighter global vegetable oil supplies.

Forecasts for soybean and product prices were all raised by the USDA. The U.S. season-average soybean price for 2021-’22 is forecast at $13.25 per bushels, up 25 cents. The soybean meal price is forecast at $420 per short ton, up $10. The soybean oil price is raised 2 cents to 68 cents per pound.

Global 2021-‘22 soybean supply and demand forecasts include lower production, crush, exports, and stocks. Global soybean production is reduced 10.1 million tons to 353.8 million. Brazil’s crop is lowered 7.0 million tons to 127 million, Argentina is lowered 1.5 million tons to 43.5 million, Paraguay is lowered 1.0 million tons to 5.3 million, and Uruguay is lowered 0.6 million to 2.0 million. While global soybean crush is lowered 5.0 million tons on a slower-than-expected crush pace for China and lower South American supplies, sunflower seed crush is reduced another 2.2 million mainly for Ukraine.

Major markets impacted by lower Ukrainian sunflower seed crush and product exports include India and the EU. Lower sunflower product supplies in these markets are partly offset by higher soybean oil imports for India and rapeseed imports for the EU. Tighter oilseed supplies and high oilseed meal and vegetable oil prices reduce forecasts for global demand growth. Global 2021-‘22 soybean trade is reduced 6.4 million tons to 158.6 million, with lower exports for South America that are partly offset by higher U.S. exports. Imports for China are reduced 3 million tons to 94 million. Other markets with lower imports include Russia, Bangladesh, Egypt, the EU, Pakistan, Argentina, and Belarus. Global soybean stocks are lowered 2.9 million tons to 90 million tons, the lowest level since 2015-‘16.