• The USDA (US Department of Agriculture) has released the monthly projections for vegetable oils. The USDA has reduced its forecast of 2024E/2025F US soybean inventory to 550mil bushels from 560mil bushels due to lower carry-over stocks. Comparing 2024E/2025F against 2023/2024E, US soybean production is expected to rise by 10.1% to 4,586mil bushels from 4,165mil bushels on the back of higher planted areas and yields.

• World soybean inventory is estimated to increase by 19.9% to 134.6mil tonnes in 2023/2024E from 112.3mil tonnes in 2024E/2025F, underpinned by higher production in Brazil, Argentina and US. Soybean output in Brazil is forecast at 169mil tonnes in 2024E/2025F vs. 153mil tonnes in 2023/2024E. Soybean production in Argentina is envisaged to rise to 51mil tonnes in 2024E/2025F from 48.1mil tonnes in 2023/2024E.

• Bloomberg reported that China will start an anti-dumping probe into rapeseed imports from Canada as trade tensions escalated after the government imposed tariffs on China-made electric vehicles, steel and aluminium. Last month, Canada announced a 100% levy on electric cars and 25% on steel and aluminium. More than 90% of China's rapeseed imports last year were from Canada, totalling 5.1mil tonnes.

• According to Bloomberg also, Chinese soybean crushing margins, which have been negative since June, have recovered to levels not seen in 2 months. Better margins could translate into more imports of soybean as US is getting ready to harvest its biggest soybean crop ever. There are signs China's hog herd is expanding and following reduced soy production in Brazil - the country is expected to secure an additional 675mil or more bushels of US soybean through the end of the year, according to an industry expert.

• Bloomberg reported that Indonesia plans to increase the biodiesel mandate to B40 in January next year. A government official said that Indonesia needs to raise investment in hydro-treated vegetable oils and biodiesel plants, boost palm oil production and add incentives for biodiesel to increase the mix to B50 and B60. The government estimates additional budget of Rp10.5tril for B50 and Rp20.5tril for B60. Indonesia's biodiesel consumption was 8.2mil kilolitres (7.1mil tonnes) in 8M2024.

• Reuters quoted AgRural as saying that Brazil's soybean planted areas will grow at its slowest pace in almost 2 decades of 0.9% in 2024E/2025F. AgRural expects Brazil's soybean areas to reach 46.4mil hectares in 2024E/2025F, which would mark the worst year-on-year performance since 2006/2007 when there was a drop from 2005/2006. AgRural also believes that Brazil's soybean production would reach 168mil tonnes in 2024E/2025F, up 14% on a yearly basis as adverse weather affected output in major soybean production areas last year.

• Reuters also reported that Indonesia plans to lower export levy rates of CPO to improve competitiveness against rival oils and raise farmers' income. There are 17 brackets for the export levy, with the lowest levy rate kicking in when CPO price is below US$680/tonne and the highest rate at above US$1,430/tonne. The new levy rates will have simpler price brackets, according to a government official.

• Biofuels International said that Cepsa has commenced supply of biofuels to Norwegian Cruise Line Holdings (NCL) at the Port of Barcelona.

Source: AmInvest Research - 17 Sep 2024