USDA: More soybean oil will go biofuel production in 2022-‘23

The USDA predicts that soybean oil use in biofuel production for 2022-’23 will be up in its latest World Agricultural Supply and Demand Estimates report, released May 12. Soybean oil prices are expected to be down slightly.

The USDA’s 2022-’23 outlook for U.S. soybeans is for higher supplies, crush, exports and ending stocks, when compared to 2021-’22. The soybean crop is projected at 4.64 billion bushels, up 5 percent from last year’s crop mainly on higher harvested area. With slightly lower beginning stocks, soybean supplies are projected at 4.89 billion bushels, up 4 percent from 2021-’22.

The U.S. soybean crush for 2022-’23 is projected at 2.26 billion bushels, up 40 million form the 2021-’22 forecast. Domestic soybean meal disappearance is forecast to increase 2 percent from 2021-’22 with lower soybean meal prices relative to corn. U.S. soybean meal exports are forecast at 14.4 million short tons, leaving the U.S. share of global trade near the prior 5-year average. With increased supplies, U.S. soybean exports are forecast at 2.2 billion bushels, up 60 million from the revised 2021-’22 projection. Despite reduced soybean supplies available for export from South America for the first half of the 2022-’23 marketing year, an anticipated record harvest and sharply higher exports beginning in early 2023 is expected to leave the U.S. with a lower share of global trade in 2022-’23. U.S. ending stocks for 2022’23 are projected at 310 million bushels, up 75 million from the revised 2021-’22 forecast.

The USDA currently predicts 12 billion pounds of soybean oil will go to biofuels production in 2022-’23, up from 10.07 billion pounds in 2021-’22 and 8.85 billion pounds in 2020-’21.

The 2022-’23 U.S. season-average soybean price is forecast at $14.40 per bushel compared with $13.25 per bushel in 2021-’22. Soybean meal prices are forecast down $20 per short ton from 2021-’22 to $400 per short ton. Soybean oil prices are forecast down 5 cents to average 70 cents per pound, as oilseed and product supplies rebound in foreign markets.

Global soybean production is forecast up 45.3 million tons to 394.7 million, with Brazil accounting for over half of the increase, up 24 million tons to a record 149 million. Argentina’s soybean crop is expected to reach 51 million tons and Paraguay 10 million. Partly offsetting higher global soybean and canola production is lower oilseed production for Ukraine.

Global 2022-‘23 soybean exports are expected to increase 9 percent to 170 million tons after last year’s drought-related declines in South America. China accounts for about half of the trade growth, with 2022-‘23 imports rising 7 million tons to 99 million. Global soybean ending stocks are projected at 99.6 million tons, up 14.4 million, with most of the increase in Brazil, Argentina, and the United States. Other notable soybean changes include back year revisions to China’s domestic consumption growth to better reflect per capita consumption and population growth. Soybean imports for China in 2021-‘22 are raised 1 million tons to 92 million. Global 2021-‘22 ending stocks are lowered with lower Chinese stocks, a reduction in Argentina’s soybean production, and lower U.S. stocks.