At this level, soybean oil is assumed to account for about half of expected U.S. biodiesel production from all fats and oils.

Food use is projected to increase slightly from 2011/12 at 14.2 billion pounds.

Soybean oil stocks are projected at 2.24 billion pounds, down 80 million from 2011/12. With increased use, stocks are projected to decline to an 8-year low. Soybean oil prices are projected at 52.5 cents per pound, the same level as the midpoint of the projected range for 2011/12.

Soybean exports:

With substantial growth in supply and continued strong foreign demand, U.S. soybean exports are projected at a record 1,550 million bushels in 2012/13.

The U.S. share of global trade is likely to rise partly supported by reduced competition from South American countries, where exportable supplies are impacted by drought-reduced crops expected to be harvested in 2012.

Foreign demand growth will be driven by China, which accounts for more than half of world imports. Key factors supporting China’s soybean imports for 2012/13 include strong demand for vegetable oil, growth in the livestock sector, expansion in the crushing sector, and government policies.

In contrast, minimal increases are anticipated in soybean demand by other top importing countries — including the EU-27, Japan, and South Korea.

Modest growth is expected for world trade in soybean meal supported by stronger demand in the EU and Southeast Asian countries.

U.S. exports are projected to grow 5 percent in 2012/13 to 9.2 million short tons. Soybean meal exports by Argentina also are likely to expand, while exports by India are expected to decline due to strong growth in domestic consumption.

A minimal increase is anticipated in 2012/13 for U.S. soybean oil exports, which are projected at 1.25 billion pounds. Foreign demand for U.S. soybean oil will be limited by high prices stemming from expanding domestic use and a tightening supply in the United States.

South American soybean oil exports will be constrained by growing domestic use, particularly for biodiesel. Soybean oil imports from top importers India and China could be limited by gains in trade for palm oil and rapeseed oil.

Soybean ending stocks and farm prices:

U.S. soybean ending stocks for 2012/13 are projected at 205 million bushels, down 70 million from the level projected for 2011/12. The ending stocks-to-use ratio of 6.1 percent would be below the previous two years, but near the 5-year average of 6.3 percent.

With projected lower corn prices and less favorable forward pricing opportunities compared with a year earlier, the season-average farm price for soybeans is projected at $11.50 per bushel, down from the $11.70 mid-point of the 2011/12 projected range.