US domestic soybean oil demand could rise this year: sources

New Delhi — The domestic soybean oil demand in the US could rise slightly in 2020 due to the latest diesel blending policies of the government, market sources said Tuesday

"A January 1 reinstatement of a $1-per-gallon blending credit for biomass based diesel may significantly improve demand for soybean oil as a feedstock this year," the USDA said in February.

The amount of US soybean crushed in January was up 3% year on year at 5.66 million mt, Department of Agriculture data showed Monday. Crude oil produced from soybeans totaled 2.15 billion lb in January, up 2% year on year, the report added. Also, once-refined soybean oil production, also called pure soybean oil, totaled 1.37 billion lb in January, up 2% on the year, according to the USDA.

HIGHER SOY MEAL OUTPUT

Soybean cake and meal produced for animal feed totaled 4.09 million mt in January, up 4% on the year, the USDA data showed.

As global demand for meat products rise, primarily fueled by the African swine fever-hit Asian markets, the trend of rising domestic soybean crushing demand is set to continue in the US, which needs the soybean-based animal feed to meet consumption demand from its large cattle industry, market sources said.

Also, China -- the world's biggest meat consumer -- has committed to purchasing $80 billion worth of US agricultural products in two years, including meat, under the Phase 1 trade deal, which may also boost US domestic soybean crushing in 2020.

US soybean meal production in 2019-20 marketing year (October - September) is forecast at 44.88 million mt, up 1% on the year, according to the USDA's latest world agricultural supply and demand estimates. The country is the third largest exporter of soy meal and oil, behind Argentina and Brazil, with total estimated soy meal exports of 12.30 million mt and soy oil shipment of 0.88 million mt in the 2018-19 marketing year.