• The USDA (US Department of Agriculture) has released its monthly demand and supply forecasts for vegetable oils. The USDA has reduced its 2020E/2021F forecast of US soybean inventory to 460mil from 610mil bushels.

• This is due to lower carry-over inventory from the 2019/2020E harvest. US soybean planted areas are now projected to fall by 14.4% to 75mil in 2019/2020E from 87.6mil acres in 2018/2019 while yields are estimated to drop to 47.4 from 50.6 bushels per acre. The lower forecasts are mainly due to damage inflicted on the soybean areas from the wind storm, which hit the US Midwest in August 2020.

• Looking ahead to 2020E/2021F, US soybean production is estimated to recover by 21.4% to 4.3bil bushels. Planted areas are anticipated to be 83.0mil acres in 2020E/2021F vs. 75.0mil acres in 2019/2020E. US soybean yield is estimated to improve to 51.9 bushels per acre in 2020E/2021F from 47.4 bushels per acre in 2019/2020E.

• Following the downward revision in US soybean inventory, the USDA has reduced its forecast of global soybean stockpiles for 2020E/2021F to 93.6mil from 95.36mil tonnes. Although the USDA cut its forecast of US soybean inventory by 24.6%, its estimate of global soybean inventory was only reduced by 1.9% due to higher projections for Argentina and Brazil. The USDA has raised its forecast of Brazil’s soybean inventory to 19.68mil tonnes from 19.0mil tonnes for 2020E/2021F while in Argentina, soybean stockpiles are now projected to be 27.2mil tonnes vs. 25.5mil tonnes previously.

• Bloomberg reported that the EU is threatening to renew tariffs on biodiesel from the US for a second time to help EU-based producers counter the alleged unfair trade. The European Commission said that it would examine in two probes whether to reimpose the duties introduced in 2009 and renewed in 2015 to counter alleged subsidies and price undercutting by the US producers. The anti-subsidy and anti-dumping levies lapsed on 16 September and will now stay in place during the investigations, which will last as long as 15 months. The anti-subsidy duties are as much as €237/tonne while the anti-dumping duties are as high as €198/tonne.

• Bloomberg also reported that India’s palm imports slipped from a 10-month high in August amid sluggish demand from the food services industry. The Solvent Extractors Association of India said that inbound palm shipments declined by 11% MoM and 14% YoY to 734,351 tonnes in August. Total edible oil stockpiles rose to 1.73mil tonnes as at 1 September from 1.54mil tonnes as at 1 August.

Source: AmInvest Research - 21 Sept 2020