Watch out! WASDE May Be Underestimating Food/Feed Bean Oil Demand

So. Many. Headlines. about US Biofuels policy.

But I see a story in the food oil balance sheet…..

I think the USDA is underestimating Soybean Oil demand in the Food, Feed & Industrial category of WASDE. Follow along in the images attached.

First chart is supply of major non soy/canola veg oils in the US Oct-Mar this year vs last.

Total supply (source in comments) is DOWN 670 mil lbs year on year. Big driver is palm imports, but corn, cottonseed, even sunflower oil supply is down.

Next table is the same data, with Canola oil imports + production included. Canola supply down an additional 383 mil lbs Oct-Mar YOY.

We are now sitting at a 1 bil lb reduction in supply of food/veg oils that don’t start with the letters S-O-Y.

We know from the EIA report that Oct-Feb Canola oil consumed in biofuels is actually UP slightly. Expect March data will print with a cumulative unchanged usage 6 months in to the marketing year.

Final image, May WASDE. USDA lists Food, Feed & Industrial demand for Soybean Oil DOWN 264 mil lbs.

If all other oil supply is lower by 1 bil lbs halfway through the year, and canola oil usage is essentially unchanged in biofuels so far……how can soy demand in this category be down???

Either demand is seriously weighted to the back half of the year, or total demand in this category is lower overall. I don’t see either of these scenarios.

Does this matter? Maybe, maybe not. But this bean oil biofuel story is boiling hot right now. A food/feed demand surprise could add some gasoline.

Happy trading!