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Lower Soybean Oil Demand Means Higher Ending Stocks

The current 2022-2023 U.S. soybean balance sheet remains unchanged for now as export and crush volumes are in line with current forecasts. Although soybean meal is off to the projected start, the same can’t be said for soybean oil.

Abysmal export volumes and commitments have resulted in a lower soybean oil export forecast for the current marketing year, dropping by 200 million pounds to 1.1 million pounds. Total commitments were down 90 percent on December 1. The U.S. Environmental Protection Agency released its renewable fuel obligation targets for 2023-2025, which included a slight bump in the biomass-based diesel mandate during the first year.

The EPA also approved and finalized a pathway for canola oil used in renewable diesel production. As a result, America’s soybean and canola oil balance sheets are changed to nearly offset the expected impacts on domestic use. Ultimately, the soybean oil ending stocks forecast got raised to 1.9 billion pounds.

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