Wasde: Veg oils feedstock output cut in line with expectations

Soy oil and meal contracts down after report release

Soy meal and soy oil prices lacked direction immediately after the US Department of Agriculture (USDA) released the September edition of its World Agricultural Supply and Demand Estimates (Wasde) report Tuesday, September 12, with new figures broadly in line with market expectations.

The most liquid December CME soy oil and soy meal contracts tumbled immediately after the release but were broadly unchanged fifteen minutes after the report was out.

By the time this was published, bears were getting the upper hand, especially on the soybean and soy oil markets, but trade remained volatile.

Production estimates

The USDA lowered its projections for 2023-24 soybean yields, production and ending stocks in the US, which was largely anticipated, and the size of the cut was higher but not far from the average trade guess.

New crop soybean crush, and hence the production of downstream soy oil and meal, was cut by 1.8 million tonnes, with lower volumes projected for Argentina, Pakistan, the EU, Thailand and the US.

“Argentina’s crush is reduced 1.8 million tonnes to 34.5 million on lower expected supplies over the next several months prior to next year’s harvest,” the USDA said.

In the US, crush volumes were trimmed by 280,000 tonnes to 62.3 million tonnes due to lower domestic soybean availability.

While little changes were made to US soy meal and oil ending stocks, average prices for the season were increased by 1 cent per pound to 63 cents per pound for the latter.

Lower global crush volumes were partly offset as China’s 2023-24 crush was raised by one million mt to 96 million mt “in line with higher crush and domestic soybean meal demand,” the USDA said.

The USDA cut its estimates for feedstocks of other vegetable oils with lower rapeseed production seen in Canada due to ongoing drought-related headwinds and the EU as well as lower sunflower seed production in the EU and lower cottonseed production in India.

Those were partly offset by higher sunflower and rapeseed production in Ukraine where soybean output was also upgraded.

Click here to view our dedicated page for biofuel feedstock prices.

What to read next
Total EU soybean import for the year to date reaches 7.2 million tonnes, with Spain, Netherlands, Germany, Italy and Portugal being the main importers
What are the main challenges on the path to decarbonization and the adoption of sustainable aviation fuels for the aviation industry?
Analyzing trends, outlooks and influential factors in the global palm oil market
Brazil's food agency, Conab, has reduced its soybean and corn output forecasts due to adverse weather conditions impacting crop development,
Published in a recent Gaftaworld issue, Tim Worledge, editorial director at Fastmarkets Agriculture shares his view on oilseeds and veg oils 2024 demand outlooks
The 45 projects slated to produce the biofuel could produce up to 1.7 million tonnes of sustainable jet fuel by 2023, analysis from Transport & Environment showed