Podcast Summary
Soybean Crush Demand Growth: The US soybean crush demand is projected to grow significantly due to expanding renewable diesel production, driven by government incentives, resulting in a 30% increase in total production equivalent to that of Minnesota, North Dakota, and South Dakota combined.
The demand for soybean crush in the US is expected to grow significantly in the coming years due to expanding renewable diesel production. This trend is driven by government incentives aimed at reducing greenhouse gas emissions, including the Renewable Fuel Standard, federal tax credits, and low carbon fuel standards in certain states. As a result, the soybean industry is projected to crush 2.4 billion bushels next year, a 6% increase from the current year, and a total increase of 725 million bushels in the years ahead. This growth represents a 30% increase in equivalent to the total soybean production in Minnesota, North Dakota, and South Dakota combined. The shift towards renewable diesel production provides more flexibility in the energy supply chain and offers benefits in terms of reduced greenhouse gas emissions.
Soybean Oil and Meal Markets: Soybean oil demand is driven by renewable fuels and food, with food making up the majority. Demand for both oil and meal is expected to grow steadily, and understanding production costs and marketing plans is crucial for growers.
The demand for soybean oil is driven by two main markets: renewable fuels and food. Renewable fuel demand is experiencing significant growth, while food demand, which makes up the majority, is growing at a steady pace of 2% to 3% per year. Soybean oil is used in various food products, and CHS supplies a significant amount to the food industry through its joint venture, Ventura Foods. Regarding soybean meal, demand is expected to increase steadily by 3% to 5% per year, with US production reaching one third of the total. For growers, it's crucial to understand their cost of production and have a marketing plan with incremental sales targets. Crop production issues and demand spikes will create marketing opportunities. If you have storage, look for opportunities to carry grain when returns exceed your storage costs, and there will likely be better basis marketing opportunities after harvest. Overall, it's essential to focus on the fundamentals of grain marketing in these challenging markets.
Disclaimer: Disclaimers are important reminders that information provided during conversations should not be relied upon as professional advice and that financial decisions should be made with caution and consultation with professionals
It's important to remember that any information or opinions discussed during this conversation, including those related to trading, are for informational purposes only. They do not constitute professional advice and should not be relied upon as such. CHS, as a provider of this information, makes no warranties about the accuracy or completeness of the information provided and will not be held liable for any errors or omissions. It's crucial to approach financial decisions with caution and to consult with relevant professionals before making any significant moves in the market.