• The USDA has released its monthly demand and supply projections for vegetable oils. The USDA has reduced its forecast of US soybean inventory for 2021/2022F to 325mil from 350mil bushels because of higher domestic crushing. Comparing 2021/2022F against 2020/2021 however, US soybean inventory is still expected to increase to 325mil from 257mil bushels on the back of a rise in planted areas. Planted areas of soybean in the US are estimated to be 87.2mil acres in 2021/2022F vs. 83.4mil acres in 2020/2021.

• Global inventory of soybean for 2021/2022F has been revised downwards to 92.8mil tonnes from 95.2mil tonnes dragged by lower stockpiles in the US and Brazil. The USDA has reduced its forecast of Brazil soybean production by 3.6% to 134.0mil tonnes due to the drought in South America. Soybean inventory in Brazil for 2021/2022F is now expected to be 22.34mil tonnes compared with 23.6mil tonnes previously.

• Bloomberg reported that India has extended a rule that imposes limits on inventories of edible oils and oilseeds by three months to ease rising prices. The cap on stockpiles will be in place until 30 June. Exporters and importers are exempted from the limits.

• Also, Indonesia’s Trade Ministry now requires exporters of palm products, including crude palm oil, olein, stearin and biodiesel, to get permits before shipping products overseas. Export permit applications must include the realisation of domestic distribution of crude palm oil and/or refined palm olein since 25 January. Incidentally, Indonesia has issued permits for six companies to export a total of 310,000 tonnes of crude palm oil and 18,178 tonnes of palm olein. Exporters can seek permits for subsequent shipments by submitting the realisation of domestic market obligation and domestic price obligation.

• According to Bloomberg also, Thailand has cut the proportion of biodiesel in dieselfuel to 5% from 7% from 5 February to 31 March to ease the country’s burden in subsidising retail diesel prices. The temporary move is necessary to help the management of retail oil prices amid rising prices of oil and biodiesel. In November 2021, Thailand cut the blending ratio to 7% from 10% and suspended the production of 10% and 20% blended diesel for four months.

• S&P Global Platts reported that Brazil’s soybean exports surged to 2.47mil tonnes in January 2022 from 49,498 tonnes a year earlier. The bulk of the soybean exports in January went to China, according to local traders. Brazil’s soybean harvest for 2021E/2022F started well ahead of the normal schedule, supporting export volumes with the harvest in Mato Grosso and Parana almost three weeks ahead of last year’s pace. AgRural said that Brazil’s harvest had reached 10% of the projected area of 40.4mil hectares by 27 January, up from 2% a year earlier.

• Bioenergy News quoted Eurostat as saying that the EU has met the 10% target level for the share of renewable energy in the transportation sector. Eurostat data showed that the average share of renewable energy in the transportation sector increased from 1.6% in 2004 to 10.2% in 2020, 0.2 percentage point above the targeted level. Among the EU member states, 12 surpassed the target. Sweden was the clear leader in the use of renewables in the transportation sector at 31.9%, followed by Finland (13.4%), the Netherlands (12.6%) and Luxembourg (12.6%).

• Reuters reported that China may have bought US soybeans for next year. Last month, China and unknown buyers may have bought up to 1.9mil tonnes of new crop US soybeans, which is well above average but still lower than last year’s three million tonnes. But for other destinations, new crop soybean sales of almost 100,000 tonnes as at 27 January were close to normal but below the record high of 500,000 tonnes.

Source: AmInvest Research - 14 Feb 2022