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Situation and Outlook
SUMMARY
The U.S. oilseed crush forecast for 1997/98 is increased this
month as both estimated domestic and export demand for oilseed
products are increased. However, reduced oilseed export prospects
leave carryover stocks only a little lower compared to last
month. Most of the changes in the forecast are in soybeans, with
crush raised 545,000 tons (20 million bushels) while exports are
cut 408,000 tons (15 million bushels), to 26.1 million tons (960
million bushels).
Increased crush is based on larger domestic use and export
prospects for both soybean meal and soybean oil. Domestic use for
both soybean oil and soybean meal was about 5 percent ahead of
year-earlier levels in October-December. Soybean meal use is
expected to slow as pipeline inventory demands subside and
poultry production growth slows. Soybean meal exports were off to
a very strong start through January, but are expected to show a
seasonally strong drop after March when record South America
crops enter the market. Soybean oil exports will remain
seasonally strong as global vegetable oil inventories are
forecast to tighten. Malaysian palm oil production is cut to 8.8
million tons this month, off 200,000 tons from last month and
last year, and sunflowerseed oil production and exports are
reduced for Argentina.
U.S. soybean prices are unchanged this month while soybean meal
prices are slightly down at $195 to $210 per short ton. Soybean
oil prices are increased slightly to 24.75 to 27.25 cents per
pound.
Global oilseed production for 1997/98 is forecast at a record
283.6 million tons, up 2.6 million tons from last month and 22.8
million tons from last year. Foreign production, forecast at
199.0 million tons, accounts for the gain from last month.
Soybean output is forecast at 152.3 million tons, up 1.7 million
tons from last month. Argentina's soybean crop is forecast to
reach a record 16.0 million tons, up 1.5 million tons, as growing
conditions remain ideal. Other changes mainly reflect historical
upward revisions for African peanut crops and a reduced
sunflowerseed crop in Argentina.
Foreign soybean and soybean meal demand changes this month are
largely offsetting. Soybean meal imports and use are raised
slightly for Japan and China, offsetting a reduction in
Indonesia. For soybean meal exports, India's prospects are cut
200,000 tons based on early-season quality problems and slowed
crush. This more than offsets an increase in Argentina's soybean
crush and soybean meal exports. For soybeans, a combined
400,000-ton increase in Argentina's and Paraguay's exports and a
reduction in Malaysia's and Indonesia's soybean imports are
expected to sharply slow U.S. soybean exports in the last half of
1997/98.
Soybeans
The 1997/98 world soybean production forecast was increased 1.7
million tons this month to 152.3 million tons reflecting
increases in Argentina and Paraguay. Expanded area in Argentina
and good to excellent growing conditions in both countries have
raised yield potential 7 percent and 4 percent, respectively.
Forecast world soybean exports were reduced this month mirroring
a 2-percent drop in the U.S. export forecast that more than
offset larger export forecasts for Argentina and Paraguay.
Decreased import estimates for Malaysia and Indonesia in response
to their financial crisis accounted for most of the decline in
the world soybean import forecast this month. The world ending
stock forecast for September 1998 was raised this month based on
larger supplies in Argentina. U.S. soybean ending stocks were
reduced reflecting higher crush in response to strong domestic
and international meal and oil demand.
Global soybean meal exports in 1997/98 are forecast at 35.9
million tons reflecting a 2 percent increase in the U.S. and
Argentina's forecast in response to continued strong world
demand. China's import demand continues to lead and support
strong soybean meal imports and consumption in Asia. China's
soybean meal imports were raised 100,000 tons this month to 4.6
million tons.
The world soybean oil export forecast for 1997/98 was raised
109,000 tons to 6.3 million tons in response to increases this
month in the U.S. and Argentina. The U.S. soybean oil export
forecast were increased 22 percent above the year earlier level
at 1.1 million tons. Global 1997/98 soybean oil imports were
raised 128,000 to 6.3 million tons based on expected growth in
soybean oil demand in China.
Soybean Highlights
The U.S. soybean export forecast was reduced this month reflecting strong competition from South America. However, the soybean meal and oil export forecasts were raised this month based on continued strong world demand for the products and higher U.S. availabilities.
Malaysia's soybean imports for 1997/98 are
reduced by 100,000 tons this month due mainly to slowing demand
as the economic crisis continues and the currency devaluation
keeps prices high.
Indonesia's soybean imports for 1997/98 are
reduced 70,000 tons this month as the fast import pace
experienced in the beginning of the year has slowed considerably
due to currency devaluation. As of February 5th, Indonesia had
imported 66 percent of the estimated total imports of 800,000
tons. Imports of soybean meal for 1997/98 are reduced by 190,000
tons this month as poultry producers continue to struggle with
the currency devaluation.
Despite the record harvest of soybeans this year, India's
exports of soybean meal are reduced this month by 200,000 tons to
3.0 million tons because of early season quality problems due to
high moisture content soybeans.
Other Oilseeds
World oilseed production for 1997/98, excluding soybeans, was
increased 967,000 tons in February to 131.3 million tons. The
adjustment of oilseed production estimates for many smaller
countries accounted for most of the increase. Of particular note
was an increase in peanut production estimates, primarily in
Africa. Total world peanut production in 1997/98 is estimated at
27.0 million tons, an increase of 752,000 tons over the January
estimate. However, total production remains nearly 2 million tons
below last year's level as the increases failed to offset the
decline in China's 1997 peanut production.
For other oilseeds, both copra and rapeseed production estimates
were increased this month. Rapeseed production rose in response
to increases among a number of smaller producers, while a 220,000
ton increase in Indonesia's copra production forecast to 1.7
million tons accounted for all of the world copra change this
month. Forecast trade in other oilseeds was increased this month
with exports up 280,000 tons to 11.8 million tons. With
sunflowerseed, a rebalancing of EU trade based on final 1996/97
trade figures resulted in an increase in France's exports to
other EU countries. Argentina's sunflowerseed export forecast was
reduced 100,000 tons this month in response to their lower
production estimate.
Forecast 1997/98 other oilseed crush was increased 262,000 tons
this month as higher copra, cottonseed, peanut, and rapeseed
crush more than offset reduced sunflowerseed and palm kernel
crush. Compared to last year, total crush of other oilseeds is
expected to rise 1.5 million tons to 104.0 million tons. The
total other oilseed ending stocks forecast for February was
reduced 130,000 tons to 3.3 million tons. This is 6 percent below
a year ago and reflects a 27 percent reduction in sunflowerseed
stocks in 1997/98 compared to a year earlier.
World protein meal production, excluding soybean meal, was
increased 229,000 tons in February to 57.6 million tons.
Increased cottonseed, rapeseed, peanut, and copra crush equally
contributed to the increase this month. Increases in rapeseed and
copra meal exports helped boost the export forecast for other
oilseed and protein meals to 16.2 million tons in 1997/98, nearly
unchanged from last year. Forecast consumption of protein meals,
excluding soybean meal was increased this month due to the larger
expected production of protein meals. Protein meal ending stocks
are projected lower in 1997/98 due to a reduction in Japan's
fishmeal stocks and small reductions in world sunflowerseed,
copra, and palm kernel meal stocks.
World vegetable and marine oil production, excluding soybean oil,
was reduced 88,000 tons this month to 54.7 million tons as lower
forecast production of palm, palm kernel, and sunflowerseed oils
was partially offset by an increase in forecast coconut oil
production. Forecast vegetable and marine oil exports, excluding
soybean oil, was increased 226,000 tons this month to 21.9
million tons in response to increased coconut and rapeseed oil
export forecasts. Forecast oil consumption, excluding soybean
oil, was increased slightly this month to 54.2 million tons.
Increased palm, peanut, and olive oil consumption forecasts more
than offset lower rapeseed, palm kernel, and sunflowerseed oil
consumption forecasts. Total consumption of other oils is still
expected to show a 2.5 percent increase over 1996/97 consumption.
Forecast ending stocks, excluding soybean oil, were reduced
122,000 tons in response to a lower palm oil stock forecast this
month.
Other Oilseed Highlights
Palm oil production for Malaysia is reduced
this month by 200,000 tons as the rain situation during the last
two years as well as the haze during the dry season continue to
affect yields.
Preliminary data for Indonesia's copra
production indicate that yields have improved; therefore, the
production estimated for 1997/98 is increased this month by
220,000 tons. Although production of palm oil is unchanged this
month, the recent announcement of the Indonesian government to
maintain the export ban on palm oil well past March 1998 has
pushed the word price of palm oil to new highs. The export ban
was imposed because of the very low Indonesian stocks as well as
the desire of the government to ensure supplies for domestic use
at affordable prices.
Peanut production in sub-Saharan Africa was
increased 546,000 tons this month in response to an adjustment in
historical production estimates. Production estimates were also
increased in the Middle East/North Africa region, up 119,000
tons, and Asia, up 99,000 tons. For the most part, these changes
had little impact of world peanut trade as much of the additional
production is consumed locally as whole peanuts, or as meal and
oil.
Australia's 1997/98 rapeseed exports were
increased 140,000 metric tons to 505,000 metric tons. Export
growth has been driven by import demand from China. China's
rapeseed imports were increased 250,000 metric tons to satisfy
increased crush demand for the relatively high oil-bearing seed.
Argentina's and South Africa's
sunflowerseed production forecasts were reduced this month.
Production in Argentina was reduced 250,000 ton to 5.8 million
tons due to detrimental weather conditions while South Africa's
production was reduced 150,000 to 450,000 on the account of a
reduction in planted area. Farmers in South Africa reduced
plantings in expectation of a dry December due to the El Nino
weather phenomenon.
Production in Russia was increased 200,000
tons to 2.8 million tons based on an updated post harvest report
from the Russian state statistical committee.
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