The USDA increased its prediction for 2020-’21 soybean oil use in biodiesel production in its latest World Agricultural Supply and Demand Estimates report, released on Jan. 12. The forecast for soybean production, however, is down.

According to the report, 2020-’21 soybean production is estimated at 4.135 billion bushels, down 35 million led by reductions for Minnesota, Iowa and Kansas. Harvested area is estimated at 82.3 million acres, up slightly from the December report. Yield is estimated at 50.2 bushels per acre, down 0.5 bushels.

With higher imports and slightly higher beginning stocks, soybean supplies are down 14 million bushels from last month. The soybean crush forecast is raised 5 million bushels to 2.2 billion, reflecting improved prospects for soybean meal exports with a lower export forecast for Argentina.

The soybean export forecast is raised 30 million to a record 2.23 billion bushels. With lower supplies and increased use, ending stocks are projected at 140 million bushels, down 35 million from the previous forecast.

The USDA currently predicts 8.2 billion pounds of soybean oil will go to biodiesel production in 2020-’21, up from a forecast of 8.1 billion pounds made in the December WASDE. Approximately 7.858 billion pounds of soybean oil went to biodiesel production in 2019-’20, down from 7.863 billion pounds in 2018-’19.

Soybean and soybean product prices are forecast higher this month. The U.S. season-average soybean price for 2020-’21 is projected at $11.15 per bushel, up 60 cents as cash prices in central Illinois reach six-year highs. The soybean meal price is projected at $390 per short ton, up $20. The soybean oil price is forecast at 38.5 cents per pound, up 2.5 cents.

Internationally, soybean production is lowered 2 million tons to 48 million for Argentina and 200,000 to 2.2 million for Uruguay, reflecting dry weather conditions in December and early January. Mostly offsetting lower South American soybean production is a 2.1-million-ton increase to 19.6 million for China on recent government data. Global soybean stocks are lowered 1.3 million tons to 84.3 million, with lower stocks for Argentina and the U.S. that are partly offset by higher stocks for China.