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Situation and Outlook
SUMMARY
U.S. oilseed production in 1998/99 is projected
rise 2 percent to a record 86.2 million tons. Cottonseed is the
only oilseed where production is projected to drop. U.S. soybean
output is projected at a record 76.2 million tons or 2.8 billion
bushels, up 3 percent from 1997/98. Plantings of 72 million acres
would be the largest on record and a yield of 39.5 bushels per
acre would be the highest since the 1994/95 record of 41.4
bushels per acre. With larger beginning stocks, total soybean
supplies are projected to rise 6 percent. With anticipated slower
soybean crush and exports, soybean carryover stocks are forecast
to climb to 11.1 million tons (410 million bushels), the highest
since 1986/87.
Global oilseed production for 1998/99 is projected at a record
288.5 million tons, up about 5 million tons from 1997/98. Most of
the gain will be in rapeseed and sunflowerseed production, while
soybean production will be relatively unchanged and cottonseed
production will decline. Large South American crops currently
being harvested will add to initial 1998/99 soybean supplies,
particularly this fall. Global soybean meal consumption will
slow, particularly in Asian markets. In contrast to soybeans and
soybean meal, U.S. soybean oil exports are forecast to remain
strong in 1998/99 as world supply-use balances remain extremely
tight.
U.S. soybean and soybean meal prices are projected to average
sharply lower in 1998/99 while soybean and other vegetable oil
prices increase. Soybean prices are projected at $4.75 to $5.75
per bushel, down from $6.45 in 1997/98 and the lowest in over ten
years. Soybean meal prices of $145 to $160 per short ton would be
the lowest since the mid 1980's. Soybean oil prices are projected
to range between 27 and 30 cents per pound.
Global oilseed production for 1997/98 is revised up slightly to
283.3 million tons as Brazil's soybean crop and China's peanut
crop estimates were raised. U.S. soybean crush was increased
680,000 tons to 42.2 million tons. Soybean meal exports were
raised 499,000 tons to 7.7 million tons partially offsetting an
817,000 ton drop in U.S. soybean exports.
Soybeans
World soybean production in 1997/98 is forecast at 152.6
million tons, up slightly from last month's estimate. Brazil's
1998 soybean crop estimate was increased to 30.7 million tons
this month reflecting larger area and high yields. Soybean
production in Paraguay is forecast to decline 200,000 tons due to
a drought in key provinces (Missiones and San Pedro) during
harvest that reduced yields.
The world soybean export forecast for 1997/98 was reduced this
month due to a 3 percent drop in the U.S. soybean export
forecast. Larger supplies in South America along with a slow
export pace beginning in April 1998 supports an 817,000-ton cut
in the U.S. soybean export forecast. This change reduces the
year-to-year export gain to only 4 percent. With larger
exportable supplies, Brazil's soybean export forecast was raised
750,000 tons to 8.2 million tons. The higher volume of soybean
exports also reflects the continued impact the elimination of the
DET has had on the mix of soybean and products exports.
Paraguay's soybean exports were raised slightly at the expense of
crush in response to foreign demand and reduced domestic crush
margins.
Forecast world soybean imports for 1997/98 at 39.0 million
tons are down slightly reflecting a 100,000 ton reduction in
Indonesia's import estimate. The world ending stocks forecast for
September 1998 was raised due in part to the larger U.S. ending
stocks forecast resulting from this month's reduced U.S. soybean
export forecast.
Global soybean meal exports in 1997/98 are forecast at 35.9
million tons, up 191,000 tons because of an increase in the U.S.
export forecast. The U.S. domestic crush forecast is increased in
support of strong soybean meal export activities. Brazil's
soybean meal export projection is lowered based on reduced
exportable supplies resulting from a reduction in crush. The
soybean meal export forecast for Paraguay was also reduced this
month reflecting smaller exportable supplies.
The world 1997/98 soybean meal import forecast was increased this
month to 35.8 million tons. Import and consumption forecasts were
raised this month for South Africa, Egypt, Belgium/Luxembourg,
Germany, and Ecuador, more than offsetting declines in Japan
Indonesia, and the United States. Lower soybean meal prices are
expected to lead to an increase in consumption, exports and
imports.
Soybean Highlights
Egypt's soybean production in 1997/98 is
forecast at 35,000 tons, down 5,000 tons from last month and
based on official Egyptian statistics. The soybean import
forecast is also reduced slightly to 196,000 tons. In response to
reduced soybean supplies and reduced crush, the 1997/98 soybean
meal import estimate was increased 25,000 tons to 550,000 tons.
Total soybean meal consumption for 1997/98 is up 7 percent from
last year. This increase has been particularly seen in the
poultry sector where most soybean meal is utilized. The dairy
industry is also beginning to expand and modernize, and many
farms have begun using high quality feed rations containing
protein meals. The Egyptian soybean oil import and consumption
estimates were unchanged this month at 100,000 tons and 139,000
tons, respectively.
Other Oilseeds
World oilseed production for 1997/98, excluding soybeans, was
increased 153,000 tons in May to 130.7 million tons. An increase
in China's peanut production forecast more than offset declines
in U.S. and Argentine cottonseed and Argentine sunflowerseed
production. Peanut production in China was increased to 9.6
million tons based on recently released government statistics.
This is up 820,000 tons from the April estimate. For cottonseed,
U.S. production for 1997/98 was reduced 312,000 tons to 6.3
million tons in response to reduced ginning figures reported this
month. In Argentina, cottonseed production was reduced due to
recent heavy rains and flooding, falling 120,000 tons to 580,000
tons. Argentine sunflowerseed production was also reduced this
month due to adverse weather resulting in a 200,000 reduction in
forecast production for 1998 to 5.0 million tons.
The world oilseed export forecast for 1997/98, excluding
soybeans, was reduced 50,000 tons this month in response to lower
cottonseed exports from the U.S. and Africa. Other oilseed crush,
which excludes soybean crush, was increased 260,000 tons this
month to 103.8 million tons. An increase in China's peanut crush
led the way, offsetting reduced cottonseed and sunflowerseed
crush. The other oilseed ending stocks forecast for 1997/98 was
nearly unchanged in May at 3.3 million tons.
World protein meal production, excluding soybean meal, was
reduced 343,000 tons in May to 57.0 million tons. This decline
occurred despite the increase in crush noted earlier as
production forecasts for fishmeal, cottonseed, and sunflowerseed
meal were reduced this month. In addition, peanut meal production
for China, while larger than last month in response to the
increase in crush, was below potential due to a reduction in
crush yield resulting from poor peanut quality attributed to last
summer's drought. With the lower world production of protein
meals, excluding soybean meal, exports are projected to decline
300,000 tons from last month to 15.4 million tons. Consumption of
other oilseed meals, at 57.2 million tons, was down 92,000 tons
for the month but is nearly unchanged from 1996/97. The world
ending stocks forecast for protein meals, excluding soybean meal,
was reduced 82,000 tons this month to 1.8 million tons primarily
on the drop in fishmeal supplies.
World vegetable and marine oil production, excluding soybean oil,
was reduced 90,000 tons this month to 54.7 million tons in
response to lower forecast production of palm and sunflowerseed
oil. Production of cottonseed and fish oil were also down this
month while peanut oil production in China climbed higher. With
the reduction in vegetable and marine oil production this month,
exports were also reduced. Total world exports, excluding soybean
oil, were down 101,000 tons to 21.9 million tons. Lower
sunflowerseed, cottonseed, and fish oil exports more than offset
an increase in palm oil exports this month. Vegetable and marine
oil consumption forecasts, excluding soybean oil, was increased
130,000 tons this month to 55.2 million tons. The ending stocks
forecast, excluding soybean oil, was increased 60,000 tons this
month due to an increase in U.S. coconut oil stocks.
Other Oilseed Highlights
China's 1997/98 peanut production estimate
was revised upwards 820,000 tons to 9.62 million tons based on
official Chinese State Statistical Bureau (SSB) data. It is
assumed that the drought caused less damage than originally
anticipated, but seed quality is still expected to be lower. The
new level of production still remains below the three-year
average of 10 million tons. In response to the higher production
estimate and China's demand for vegetable oil, the peanut crush
was raised 560,000 tons and food-use consumption was raised
200,000 tons. Exports were raised only 30,000 tons and the
residual allocated to feed, seed and waste. Due to quality
concerns, the meal extraction rate was reduced resulting in a net
65,000 ton increase in peanut meal production. Peanut oil
production was revised upward by 163,000 tons to 1.6 million
tons. This level of peanut oil production, an increase of 38,000
tons over 1996/97 levels, reflects extraction rates which are
approaching international averages.
In Chile, fishmeal production was reduced
300,000 tons to 1.05 million tons due to the lingering warming
effects of El Nino on coastal waters. Exports were reduced
200,000 tons to 850,000 tons. World fishmeal supplies are
currently below 6 million tons, the lowest level since 1983/84
which was also an El Nino year. Fishmeal production in 1998 still
remains uncertain in Chile and Peru, and both countries have
enacted fishing bans in recent months to avoid overfishing of
limited and younger fish populations.
The 1997 cottonseed production estimate for the United
States was reduced 312,000 tons this month in response
to the recently released ginning report. This brings total U.S.
cottonseed production to 6.3 million tons, down 3 percent from
1996/97.
Argentina's sunflowerseed production for 1998 is
forecast at 5.0 million tons, down 200,000 tons from last month
and 1.0 million tons below the January estimate of 6.0 million
tons. Argentine sunflowerseed farmers responded strongly to
favorable world market prices by bringing additional land and
productive resources into play, and increased planting by about
15 percent on a year to year basis. As with all agricultural
endeavors, the year was not without complications as
sunflowerseed areas were damaged or lost because of high winds
and poor weather late in the season. Although Argentina's
sunflowerseed export forecast was unchanged this month at 100,000
tons, crush was reduced to 4.9 million tons, 5 percent below the
1996/97 level. With the lower crush, production of meal and oil
have been reduced with a subsequent reduction in sunflowerseed
meal and oil exports. Exports for 1998/99 (current year) are
forecast at 1.9 million tons and 1.5 million tons, respectively.
Argentina's 1998 cottonseed production was
reduced 120,000 tons to 580,000 tons this month and is 20 percent
below earlier estimates. The reduction in output this year is due
to recent heavy rains and flooding that resulted in the
abandonment of some acreage.
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