By Jen Del Carmen
While it’s clear that the COVID-19 pandemic has affected every aspect of daily life around the globe from school to sports to business, the effects of the lockdown on soybean oil may not be top of mind. A recent Bloomberg story called attention to the expanded possibilities for soybean oil.
A surge in online orders during shutdowns led to increased truck mileage for cyber retailers such as Amazon whose delivery trucks are usually powered by biodiesel and its green alternatives. For context, there are two general types of biodiesel produced in the U.S. – conventional biodiesel is made from crude vegetable oil soy, canola, or corn, reclaimed cooking grease, inedible or edible meat fats, and renewable diesel is produced from refined vegetable oil, such as refined bleached and deodorized soybean oil.
Biodiesel made with soybean oil is a renewable, clean-burning diesel replacement that can be used in existing diesel engines without modification. With soy oil accounting for about nine billion pounds of biodiesel feedstock annually, there’s enough soybean oil to power a lot of deliveries.
“Truck traffic has been moving along,” said Mac Marshall, vice president of market intelligence for USB and the U.S. Soybean Export Council (USSEC). “I’m probably going to get five Amazon packages at my door today. When you think about the long-haul truck fleets, those are primarily consuming diesel so the demand on the biodiesel side hasn’t abated.”
Futures traded in Chicago have rallied almost 40% since hitting a low in March, when coast to coast lockdowns in the United States caused demand for most commodities to plummet. The U.S. Department of Agriculture (USDA) is already forecasting the use of soybean oil to make biodiesel will jump more than 3% this season after declining a year earlier.
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