The USDA lowered its forecast for soybean oil use in biodiesel production in its latest World Agricultural Supply and Demand Estimates report, released on April 9. The outlook for soybean oil prices was revised up.

The USDA raised its outlook for soybean exports, mainly reflecting record exports through the first half of the marketing year. Soybean crush is reduced this month of a lower domestic soybean meal disappearance forecast and a higher projected extraction rate. Seed use is reduced in line with plantings for the 2021-’22 crop year indicated in the USDA’s March 31 Prospective Plantings report. Residual use is reduced based on indications in the agency’s March 31 Grain Stocks report. Soybean ending stocks are projected at 10 million bushels, unchanged from the previous forecast.

The USDA currently expects 7.9 billion pounds of soybean oil will go to biodiesel production in 2020-’21, down from the forecast of 8.3 billion pounds made in the March WASDE. An estimated 7.858 billion pounds of soybean oil went to biodiesel production in 2019-’20, down slightly from 7.863 billion pounds in 2018-’19.

Currently, the WASDE report reflects only biodiesel made from methyl ester. Starting with the May WASDE, the USDA said “biofuel” will replace “biodiesel” in the soybean oil section of its report, reflecting recent changes to monthly biofuels data reported by the U.S. Energy Information Administration. As a result, the report will reflect expected soybean oil use for the production of a wider variety of biofuels, including biodiesel and renewable diesel.  

The season-average soybean price is forecast at $11.25 per bushel, up 10 cents. The soybean oil price is projected at 45 cents per pound, up 4 cents reflecting sharply higher prices in march. Higher soybean oil prices are expected to continue in coming months as additional renewable fuel capacity comes online. Soybean meal prices are unchanged at $400 per short ton.

Globally, soybean production is raised 1.4 million tons to 363.2 million tons, mainly reflecting a 2-million-ton increase to 136 million for Brazil. Favorable crop conditions in Brazil’s southern state of Rio Grande do Sul and updated harvest results from national and state agencies support higher yields. Partly offsetting is reduced soybean production for the EU-27+U.K. and Paraguay.

Global soybean crush is forecast lower mainly on lower crush for China, which is reduced 2 million tons to 96 million on the recent slow crushing pace. Global soybean exports are increased to 1.2 million tons to 170.9 million. Brazil, Russia and U.S. exports are revised higher while Paraguay and Ukraine shipments are lowered. Global soybean ending stocks are raised 3.1 million tons to 86.9 million, largely on higher stocks for China and Brazil.