- Soybean and corn prices fell following the release of USDA’s (US Department of Agriculture) monthly demand and supply estimates last week.

- USDA raised its forecast of US soybean ending inventory by 10.5% from 430mil bushels to 475mil bushels for 2014F/2015F. Projection of US soybean output was increased by 2.5% as yields were revised upwards from 45.4 bushels per acre to 46.6 bushels per acre.

- Soybean yields are envisaged to be positive in 2014F/2015F as there have been ample rains in the past month. USDA did not revise its forecast of US soybean exports significantly.

- After the revision, US soybean production is estimated to surge 19% from 3.3bil bushels in 2013/2014F to 3.9bil bushels in 2014F/2015F. Ending inventory of US soybean is expected to climb more than two-fold from 130mil bushels in 2013/2014F to 475mil bushels in 2014F/2015F.

- Bloomberg cited a trader as saying that India has huge stockpiles of palm oil currently and as such, traders are not in a rush to buy.

- Also, an industry player in India said that Malaysia’s decision to scrap the export tax on CPO for two months may not spur Indian imports because of the record shipments last month.

- SGS reported that in the first 10 days of September, palm oil shipments from Malaysia to India inched up 2.6% compared with the same period last month while China came back to the market by importing 77.6% more palm oil.

- Indonesia’s Trade Minister said that the country’s CPO export tax may be zero in October following the slide in prices. Duty on CPO exports will automatically be cut to zero if average CPO price falls below US$750/tonne. The Government will decide on the export tax rate for October by end-September.

- Finally, a government official said that biodiesel production capacity in Indonesia would rise from 5.7mil kilolitres (2mil tonnes) in 2013 to 9mil kilolitres (3.2mil tonnes) in 2015F.

- Pertamina is expected to use 2.4mil kilolitres (847,552 tonnes) of biodiesel this year versus the target of 3mil kilolitres (1.1mil tonnes). Indonesia plans to implement B20 in 2016F, which would require more than 9mil tonnes of palm oil supply.

Source: AmeSecurities