ASA: 2015 Biodiesel Production Expected To Be Between 500 And 600 Million Gallons

 

U.S. production of biodiesel made from soybeans is expected to double from 150 million gallons per year this year to 300 million in 2007 or 2008 and likely to expand further to 500-600 million by 2015, according to Rick Ostlie, President of the American Soybean Association. To produce 150 million gallons of biodiesel, 2.7 million tonnes of soybeans would be used, Ostlie estimated. The volume would come from 2.5 million acres, or about 3% of the total soybean acreage in the United States, he added.

 

By 2015, some 11 million tonnes of U.S. soybeans are expected to be used for biodiesel production, accounting for about 13% of US soy-planted acreage, given the current crop yield. He expected 2.5-3.0 million acres would be added to cropland in the United States over the next 10 years and forecast soy yield to increase by about 10% over the next decade.

 

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Increase In Biodiesel Production

 

Last week, the Census Bureau reported a surprising slow down in methyl esters (biodiesel) usage of refined soybean oil during June and a sharp drop for July. USDA recently released data from its Bioenergy Program suggesting that biodiesel production during the April-May-June (AMJ) quarter was considerably above levels implied by the Census Bureau soybean oil consumption data. Participants in USDA’s Bioenergy Program (that provides a subsidy for year-over-year increases in biodiesel and ethanol production) produced 65 million gallons of biodiesel during the AMJ quarter, 29 million gallons above the January-February-March (JFM) quarter and 49 million gallons above a year ago. The Bioenergy Program is thought to account for nearly all the biodiesel production in the United States.

 

Industry experts say it is possible there has been a surge in the use of oils other than soybean oil in biodiesel production in AMJ, but it seems more likely that the Census Bureau will revise higher its consumption of refined soybean oil in biodiesel production as it includes production from plants that have recently come on line that previously were omitted. Also, an upward revision in Census soybean oil usage in biodiesel would basically show a shift from food uses to biodiesel usage. Such an accounting may be forthcoming since the Bioenergy Program was terminated June 30, 2006.

 

Higher Yield Prospects Found By USDA

 

U.S. soybean production for 2007-06 is forecast by USDA to be 84.4 million tonnes, reflecting higher yield prospects than earlier expected, especially in the western Corn Belt, USDA said last week. Soybean export prospects could also increase based on increased supplies, lower prices, and increased import demand for China, USDA said. Ending stocks are projected by USDA to be 14.4 million tonnes. For 2005-06, strong foreign demand for soybeans and soybean meal could increase exports and crush as well as lower ending stocks, said USDA. Meanwhile, USDA expects U.S. oilseed ending stocks for 2006-07 to be 15.7 million tonnes, an increase over its previous estimate reflecting larger supplies that more than offset increased use. U.S. oilseed production is forecast at 93.6 million tonnes.

 

Global oilseed production for 2006-07 is projected by USDA to be 386.5 million tonnes. Foreign production is expected to be 292.9 million tonnes, unchanged from last year. Most of the change in foreign production is due to reduced peanut production for India, where sown area was reduced mainly by the effects of excessive early-season moisture.

 

DuPont And Bunge Expand Soybean Joint Venture

 

Last week, DuPont and Bunge announced their existing joint venture to improve soybeans for food would also start designing beans for biodiesel fuel and other industrial uses. Already, the companies already are collaborating to develop and market soy-based food products with improved nutritional traits. Now, the collaboration will be expanded into biorenewables to include soybeans whose oil can be used for lubricants and diesel fuel, the companies said. In addition, they plan to develop enhanced livestock feed products from soy meal.

 

“We have seen the interest in biofuel, industrial and feed sectors expand exponentially,” said Erik Fyrwald, head of DuPont’s agriculture and nutrition division. “We are making strides to bring products to market to meet the growing demand.”

 

Work on soy-based food products will continue, although the companies are changing the brand name to Treus. DuPont-owned Pioneer Hi-Bred International Inc., part of the partnership, sold soybean seed under the brand name Nutrium. The soybeans yield oil with low linolenic content. The oil does not require partial hydrogenation, a chemical process that improves the oil’s stability but that also produces trans fat, considered harmful to human health.

 

Pioneer expanded acreage planted with its low linolenic soybeans has grown from 14,200 hectares in 2005 to 80,900 hectares this year. The company expects increased acreage in 2007 throughout the Midwest and in Pennsylvania.

 

 Soy Complex Up On Solid Export Report And Positive Weather Outlook

 

The soy complex closed higher on September 14 reflecting forecasts for more wet weather early this week, cold weather later this week. The market also reflects strong exports as reported by USDA.Soyoil prices increased in recent days despite weak energy markets soyoil exports have picked up significantly in recent weeks. September bean futures closed up $0.73 finishing at $195.47; November was $1.75 higher, closing at $200.34; and January gained $1.75 ending at $205.30. September meal was up $3.64, closing at $177.25; October was $1.43 higher, finishing at $174.82; and December was up $0.99 to finish at $176.15. September oil closed $1.54 higher to finish at $541.01; October was up $5.07, closing at $548.06; and December increased $5.29, ending at $556.88.

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