EIA data for October show biodiesel production was 144 million gallons, up slightly from September but down 16 percent from October 2018, when production set new records right and left. This year, monthly production fell below 2018’s numbers starting in June and fell below 2017’s in September and October.
In November and December, biodiesel production tends to hold steady around October’s level, so we may see another 290 million gallons produced this year.
Soybean oil utilization for biodiesel in October fell to 558 million pounds, down 7 percent from September and down 20 percent year over year. Soybean oil cost has increased steadily since May, although in general soybean oil has remained an affordable feedstock compared to its average pricing before 2018.
Soybean oil use for biodiesel vs. soybean oil futures price
Use of canola oil totaled 115 million pounds in October, up 14 percent YOY, when utilization was down sharply from 2017’s volumes, and use of corn oil was 131 million pounds, down 26 percent YOY.
This month, the biodiesel blending credit was reinstated retroactively to January 2018 and extended through December 2022, providing a welcome stability to this politically volatile incentive.
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