March 8

3/8 – Soy-oil futures set fresh, 9-year highs of $.5338/lb on Friday. For the 2021/22 crop year, global soybean demand will continue to outstrip supply. China’s feed demand, in an effort to rebuild its ASF-decimated hog herd, will continue to be the main global demand driver. Additionally, recovery from Covid-19 will lead to a jump in global biodiesel usage. The world soybean stocks-to-use ratio is expected to decline for the 3rd straight year to 22% vs a 10-year average of over 25%. Strong soybean production rebounds, projected for the U.S. and South America, could be offset by forecasts for a hot, dry “La Niña” summer. Argentina is the largest exporter of soymeal and soy-oil. Any serious crop damage there this year would be very bullish for prices. In soy-oil, forward futures for 2021 are averaging $.5018/lb, and forward contracts for 2022 are trading in the mid-$.40s.