13 September 2012 22:21 [Source: ICIS news]
MEDELLIN, Colombia (ICIS)--The US biodiesel sector expressed concern on Thursday after US forecasters again cut their estimate for the nation's soybean harvest as a result of drought.
This year's drought is estimated to be the worst since the 1950s and has stunted crops from Ohio to Nebraska, sending grain and soy prices soaring over the summer.
The reduced soybean output this year will likely contribute to higher pricing in the spring and players in the sector worry that soy oil prices will surge.
The biodiesel industry gets much of its feedstock from soy oil.
Soybean production was forecast at 2.63bn bushels, down 2% from the US Department of Agriculture’s (USDA August estimate and down 14% from last year.
Soybean yields were expected to average 35.3 bushels/acre, down by 0.8 bushel from last month's forecast and down 6.2 bushels from last year.
Compared with last month's estimates, soybean yield forecasts were lower or unchanged across the great plains and most of the corn belt as lingering drought conditions continued to hamper yield expectations.
The soybean area for harvest in the US was forecast at 74.6m acres, unchanged from August but up 1% from last year.
The USDA projects that both soybean yields and the total soybean harvest will be the lowest in nine years.
Biodiesel is an alternative fuel, produced from renewable resources. The most commonly used feedstocks are rapeseed, soy and palm oil.
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