USDA Maintains Soybean Oil Use Forecast for Biofuel in 2023-’24, Adjusts Production Estimates

In its recent World Agricultural and Supply Estimate (WASDE) report released on November 9, the Department of Agriculture (USDA) kept its 2023-'24 forecast steady for use in biofuel production. However, the agency revised its estimate for 2022-'23 soybean oil use in biofuel production upward.

The USDA's current outlook for the 2023-'24 soybean market anticipates increased production and ending stocks. The forecasted soybean production is 4.13 billion bushels, a 25 million bushel increase attributed to higher yields. Notable production changes are expected in Wisconsin, Tennessee, North , South Dakota, and .

The USDA maintains its projection that 12.8 billion pounds of soybean oil will be allocated to biofuel production for 2023-'24, a figure consistent with the October WASDE report. For 2022-'23, the agency revised its soybean oil use in biofuel production estimate to 12.4 billion pounds, up from last month's 12.1 billion pounds. The actual soybean oil use for biofuel production in 2021-'22 was 10.379 billion pounds.

While crush and exports remain unchanged, soybean ending stocks are raised to 245 million bushels. The U.S. season-average soybean price for 2023-'24 is projected at $12.90 per bushel, maintaining parity with last month's forecast. However, the soybean oil price sees a 2-cent reduction to 61 cents per pound, while the soybean meal price remains unchanged at $380 per short ton.

The global soybean supply and demand forecast for 2023-'24 features lower beginning stocks, higher production, increased crush, and reduced ending stocks. Beginning stocks see a reduction of 1.6 million tons, reflecting balance sheet adjustments for China and Brazil. China's beginning stocks decrease due to lower soybean imports for 2021-'22 and 2022-'23, coupled with higher crush estimates for 2022-'23. Conversely, Brazil's beginning stocks increase, driven by a larger 2022-'23 crop of 158 million tons, exceeding initial expectations.

Global soybean production for 2023-'24 is raised by 900,000 tons to 400.4 million, primarily attributed to higher production in Russia, , and the U.S. Global soybean crush is also raised, driven by increased crush estimates for China and Russia. However, global soybean ending stocks are reduced by 1.1 million tons, as higher stocks for Brazil and the U.S. are offset by lower stocks for China.

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