- Platts quoted sources as saying that Pertamina has delayed awarding a third-round biodiesel tender as it is negotiating price and transport subsidies currently.

- Pertamina is seeking to buy the biodiesel at a discount to Platts Singapore gasoil price instead of at a premium. According to sources, Pertamina thinks that it can transport biodiesel more competitively.

- The third tender involves 1.7mil kilolitres (600,349 tonnes) of biodiesel. Out of these, about 115,000 kilolitres (40,612 tonnes) are for Sumatra, 28,000 kilolitres (9,888 tonnes) for Nusa Tenggara, 335,000 kilolitres (118,304 tonnes) for some areas in Kalimantan and Sulawesi and 372,000 kilolitres (131,371 tonnes) for other areas in Kalimantan, Sulawesi and Papua.

- Due to the delay, delivery of the biodiesel will be pushed to September or 4Q2014.

- USDA (US Department of Agriculture) released its latest demand and supply forecasts for vegetable oils last week.

- USDA has raised its estimate of ending US soybean inventory in 2014F/2015F by 3.6% from 415mil bushels to 430mil bushels. The upward revision was due to higher soybean production.

- After the revision, soybean production in US is forecast to rise 16% from 3.3bil bushels in 2013/2014F to 3.8bil bushels in 2014F/2015F. So far, there has been sufficient rainfall to support the production of soybean in US.

- Globally, ending inventory of soybean is expected to climb 27.6% from 67.1mil tonnes in 2013/2014F to 85.6mil tonnes in 2014F/2015F. Global production of soybean is anticipated to expand 7.3% YoY to 304.7mil tonnes in 2014F/2015F.

- The increase in soybean production is mainly driven by the US and Brazil, which is envisaged to record a 4% improvement in output.

- The US is estimated to account for 34.1% of world soybean production in 2014F/2015F. This is followed by Brazil (29.9%) and Argentina (17.7%).

- Finally, Australia’s Bureau of Meteorology said that the chance of an El Nino developing is at least 50%. However if an El Nino were to occur, it is unlikely to be a strong event.

Source: AmeSecurities