The U.S. Department of Agriculture (USDA) has adjusted its projections for soybean oil utilization in biofuel production for the 2024-’25 marketing year in its latest World Agricultural Supply and Demand Estimates (WASDE) report, released on April 10. While the forecast for soybean oil going into biofuel has been slightly reduced, the USDA has simultaneously revised its outlook for soybean oil prices upwards.

The report indicates a decrease in the anticipated volume of soybean oil directed towards biofuel production, now estimated at 13.25 billion pounds for 2024-’25. This figure represents a downward revision of 200 million pounds compared to the March WASDE report, which had projected 13.45 billion pounds. The USDA attributed this adjustment to the current pace of usage observed in the market. For the preceding 2023-’24 marketing year, an estimated 12.989 billion pounds of soybean oil were utilized for biofuel production, a notable increase from the 12.51 billion pounds consumed in 2022-’23.

Despite the lowered biofuel consumption forecast, the USDA anticipates stronger demand for soybean oil in the latter part of the marketing year. This projection is based on the expectation that tariffs impacting imports of alternative biofuel feedstocks, such as used cooking oil, will lead to increased reliance on domestically produced soybean oil.

Conversely, the overall U.S. soybean outlook for 2024-’25 points towards increased import volumes and higher crush rates, ultimately resulting in lower ending stocks. Soybean crush is projected to rise by 10 million bushels to a total of 4.42 billion bushels. This increase is driven by stronger domestic demand for soybean meal and increased soybean oil export commitments. Consequently, soybean oil exports have been revised upwards in the latest report. With soybean exports remaining unchanged and imports seeing a slight increase, the USDA now forecasts U.S. soybean ending stocks to be 375 million bushels, a decrease of 5 million bushels from the previous estimate.

In terms of pricing, the USDA has maintained its forecast for the U.S. season-average soybean price at $9.95 per bushel. However, the soybean meal price is projected to decrease by $10 to $300 per short ton, while the soybean oil price is expected to rise by 2 cents to 45 cents per pound.

Globally, the 2024-25 soybean supply and demand forecasts present a mixed picture. Beginning stocks are estimated to be higher, primarily due to an upward revision of Brazil’s 2023-24 crop by 1.5 million tons to 154.5 million tons following a review of disappearance data. Global soybean production for 2024-25 is projected to be slightly lower, by 200,000 tons, due to reduced output in Bolivia, partially offset by increased production in South Africa, the United Arab Emirates, and the European Union.