• The USDA has released its monthly demand and supply projections for vegetable oils. It raised its forecast of US soybean inventory for 2019/2020F by 12.9% to 480mil from 425mil bushels due to lower exports. Comparing 2019/2020F against 2018/2019 however, US soybean inventory is forecast to fall by 47.2% to 480mil bushels mainly due to a 19.6% decline in production. The slide in US soybean production in 2019/2020F can be attributed to smaller planted areas. Currently, the USDA is forecasting that US farmers will plant soybeans on 76.1mil acres in 2019/2020F vs. 89.2mil acres in 2018/2019.

• S&P Global cited Brazil’s foreign trade department report as saying that the country exported 11.64mil tonnes of soybeans in March 2020, up 38% YoY. Market sources said that China has started to ramp up its soybean purchases. In addition, there are uncertainties over port operations in the Americas due to the Covid-19 outbreak. According to the same article, Brazil’s soybean crop for this year is starting to pick up, which has made its beans more competitive against the US soybeans. Brazilian soybean sales usually peak in February to May every year while sales of US soybeans usually peak during the September to December period.

• Reuters cited the Indonesia Palm Oil Association as saying that oil palm estates in the country have imposed protocols to prevent the spread of the coronavirus among workers but have no plans to reduce workers’ activities. Protocol measures include checking workers’ body temperatures and limiting the movement of people in and out of the plantations. Workers coming out of the plantations must selfquarantine for 14 days. Workers are also discouraged from taking part in “mudik”, where people leave cities for their home towns and villages at the end of the fasting month.

• Reuters also reported that the US biofuel industry has asked the Trump administration for funds from the US Department of Agriculture’s Commodity Credit Corporation to help survive a demand slump triggered by the Covid-19 outbreak. The funds could be used to offset a portion of the biofuel industry’s corn and soybean purchases or as direct assistance to companies to help them retain staff. The biofuel players said that “collapsing demand” for biofuel during the outbreak had idled some 3.5 billion gallons of annualised ethanol output at a quarter of the country’s production facilities.

• In a related development, Biofuels International reported that ethanol production has plummeted to a six-and-half-year low in the USA. According to the Energy Information Association, ethanol production in the US has fallen by 16.4% or 165,000 barrels per day to a total of 840,000 barrels per day as at early April 2020. Inventory of US ethanol rose 6.5% to a record 25.7mil barrels. Volume of gasoline supplied to the US market dropped to 6.6mil barrels per day, which were 24.6% lower than the previous week and 27% lower than the same week last year.

Source: AmInvest Research - 13 Apr 2020