Along with rising US biodiesel demand for domestic use, exports of the soybean-oil-based fuel rose more than threefold in the first two months of this year, placing greater strain on already tight soybean supplies.
The heightened biodiesel usage underscores the need for a bigger soybean crop than last year. The USDA estimated 87.6 million acres of soybean plantings in 2021. But assuming steady yields, the crop will need at least 90 million acres just to match this year’s total soybean demand. Gro users can keep track of soybean supply and demand using Gro's Interactive Balance Sheet, which includes Gro’s in-season US Soybean Yield Forecast Model.
CBOT soybean oil futures have jumped 20% so far this year, while soybean futures have risen 7%, Gro data shows. Soybeans are crushed to make soybean meal, used in animal feed, and soybean oil, which is used both as a food product and to make biofuels.
Energy companies have announced plans to increase biofuel capacity twofold to fivefold by 2030, using soybean oil as a major feedstock. Soybean oil used for biodiesel ballooned from 1.7 billion gallons in 2010 to 7.9 billion gallons in 2021.
Biodiesel demand is growing globally. US exports of biodiesel and biodiesel blends of B30 totaled 48,382 tonnes in January and February, up more than three times from a year earlier. Shipments went mainly to Canada, the Netherlands, and Peru. The EU’s plan to phase out palm-oil-based biodiesel by 2030 will shift additional demand to other vegetable oils including soybean oil.
Strong demand has whittled away at US soybean stocks. Stocks-to-use ratio, a normalized measure of end-of-year stockpiles divided by annual use, shows US soybeans to be at the tightest level ever recorded.
This insight was powered by the Gro platform, which enables better and faster decisions about factors affecting the entire global agricultural ecosystem. Gro organizes over 40,000 datasets from sources around the world into a unified ontology, which allows users to derive valuable insights such as this one. You can explore the data available on Gro with a free account, or please get in touch if you would like to learn more about a specific crop, region, or business issue.