When you look at the WASDE report issued on Thursday night last week, we can see that the only reason we bounced higher is that US production of Soy was adjusted by about 4 Mil Metric Tons on account of yields. Seems pretty drastic as crop hardly harvested (10-15%) but we will not debate this now although I believe this was too drastic a cut. When you look at world production of Oilseeds from USDA, you will see that we are only lower by 1 Mil Mt at 659.36 Mil MT as almost everyone else has higher oilseed production even Ukraine and Russia who are at war. We also note that overall oilseeds exports, particularly to China, were lowered as domestic self sufficiency is now emphasised. What is more important to notice is how Biodiesel/Renewable diesel is changing flows and how Canola oil imports as well as UCO imports are disrupting feedstock use in the US. Is it really bullish Soyoil when US is now entering winter and will surely use more canola oil? Overall Biodiesel/RD Feedstock use Jan/Jul23 is up 30% in US at nearly 8 Mil MT but Canola use is only up 10% while Soy is up 24% and waste oils up 30% (EIA data) - you know Canola is coming in big in winter season and this will be at expense of other feedstocks. We should finally note that imports of Biodiesel into the US through the end of Aug is +91% over last year to 1.3 Mil MT.
Comments