• USDA has released its monthly demand and supply projections for vegetable oils, raising its forecast of 2024E/2025F US soybean inventory to 560mil bushels from 435mil bushels. The upward revision was due to higher planted areas and yields. Comparing 2024E/2025F against 2023/2024E, US soybean stocks are expected to surge to 560mil bushels from 345mil bushels.

• USDA has also raised its forecast of 2024E/2025F global soybean inventory to 134.3mil tonnes from 127.8mil tonnes due to the increase in US stocks. Global soybean production is estimated to expand to 428.7mil tonnes in 2024E/2025F from 395.1mil tonnes in 2023/2024E on the back of higher output in the USA, Brazil and Argentina.

• Bloomberg reported that the Biden administration is following the paper trails of some biodiesel producers amid heightened concerns that the fuel was at times being made with deceptive ingredients that violate federal law. The audits seek to track the source of UCO (used cooking oil) with at least 2 probes nearing completion and others expected to start soon, according to sources. The probes are in respond to a wave of UCO coming from China and beyond that are flooding the US market and undercutting producers of American-grown feedstock such as soy or corn oil.

• Reuters reported that Indonesia is carrying out tests ahead of plans by the incoming government to increase biodiesel blending to B50 from B35 currently. According to a government official, a static test for B50 is being carried out by the energy ministry and several stakeholders. This will be followed by vehicle road tests in a process that typically take a year. GAPKI (Indonesia Palm Oil Association) has warned that a higher mix would hurt exports amid stagnating production. GAPKI has also questioned the wisdom of plans to implement B40 in 2025F, suggesting that authorities are only raising the mix if export prices are less profitable. B50 will consume an estimated 18mil tonnes of CPO annually.

• Biofuels International cited an USDA report as saying that the production of renewable diesel in US has grown from 40mil gallons in 2010/2011 to 2.3bil gallons in 2022/2023 – surpassing biodiesel production for the 1st time. The increase was driven by renewable diesel producer, Neste. Renewable diesel offers significant advantages over biodiesel and significant GHG emission reductions compared to biodiesel and fossil diesel. Renewable diesel can be produced from similar fats such as biodiesel but unlike biodiesel, renewable diesel is a “drop” in biofuel, meaning it does not need to be blended with traditional diesel.

• Antara News reported that a government official has announced an increase in funds for Indonesia’s Smallholder Oil Palm Rejuvenation programme from Rp30mil (US$1,882) to Rp60mil (US$3,762) per plantation. He added that the funds have reached Rp9.6tril (US$602mil) for 154,886 plantations or 344,792ha as of June 2024. Smallholders can apply for the funds, which the government will distribute through the Oil Palm Plantation Fund Management Agency.

Source: AmInvest Research - 19 Aug 2024