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Situation and Outlook
SUMMARY
U.S. oilseed production prospects for 1998/99 continue upward
to a record 88.1 million tons, led by larger soybean production.
Soybean production is forecast at a record 79.2 million tons
(2,909 million bushels) for 1998/99, up 2.3 million tons (84
million bushels) from last month and up 7 percent from last year.
Record planted and harvested area are forecast, and the forecast
yield of 40.6 bushels per acre would be the second highest on
record. Very favorable growing conditions in August over all
major growing areas promoted good plant development and raised
yield prospects. The cottonseed production forecast was reduced
an additional 5 percent this month to 4.6 million tons. This is
down 27 percent from last year and is attributed to lower yields
and harvested area in 1998. Yields of 1.08 tons/ha are the lowest
since 1995 while area harvested is at the lowest level since
1987. Forecast U.S. peanut production for 1998 was increased 4
percent this month based on an increase in area harvested. Total
production, at 1.65 million tons, is expected to be 3 percent
higher than in 1997.
U.S. demand prospects for oilseeds and products are little changed this month, with small increases in use based mostly on reduced price prospects. Soybean crush and exports are increased slightly for both 1997/98 and 1998/99. Most of this month's increase in soybean production was added to stocks. Soybean ending stocks are projected to reach 13.2 million tons (485 million bushels), the largest since 1985/86 stocks of 14.6 million tons (536 million bushels). However, 1998/99 ending stocks would equal 18.4 percent of use, a much less burdensome level than the 28.5 percent stocks-to-use ratio in 1985/86. A small increase in U.S. export demand prospects for soybeans and soybean meal this month is based mostly on larger imports by China, Taiwan, and Egypt. Export competition is projected a little stronger this month, with increases in India's soybean production and soybean meal exports. Increases in Argentina's soybean crop and exports are largely offset by declines for Brazil.
Season-average U.S. soybean prices are forecast at $4.65 to $5.35 per bushel, off 35 cents from last month and sharply below the $6.45 in 1997/98. This would be the lowest price since the $4.78 per bushel recorded in 1986/87. Soybean meal prices are down even more sharply this month to $125 to $140 per short ton. Soybean oil prices are reduced one-half cent to 25 to 27 cents per pound.
Global oilseed production for 1998/99 is forecast at a record 290.8 million tons, up 2.7 million tons from last month and 3.7 million tons from last year. Most of the gain is in the United States. Foreign oilseed output is forecast at 202.7 million tons, up 0.6 million from last month. Prospective gains in Argentina's soybean and sunflowerseed area and production and India's soybean production this month are partially offset by declines in China's soybean and cottonseed crops and East European sunflowerseed production. Australia's rapeseed crop is increased to a record 1.6 million tons, up 0.7 million from a year ago.
Soybeans
World soybean production in 1998/99 is forecast at 156.4 million tons, reflecting a larger production estimates for the U.S. and Argentina partially offset by reductions in China and Brazil. While planting season is still a few weeks away, lower prices are expected to result in reduced area in Brazil. In Argentina, soybean area is expected to grow at the expense of corn. World soybean exports are slightly above last month's level due to an increase in the U.S. and Argentine estimates reflecting expected stronger export activity than forecast earlier. A reduction in the Brazilian soybean supply situation this month is reflected with a lower forecast for exports, crush and ending stocks. Larger import prospects for China, Taiwan, Mexico and Egypt raise the world import forecast 2 percent above last month's level. World soybean ending stocks for 1998/99 are raised 4 percent for the second consecutive month supported by a 1.5 million-ton increase in ending stocks in the U.S. South American ending stocks were reduced slightly in response to a smaller carryin and larger crush in Argentina and reduced supplies in Brazil.
World soybean meal exports in 1998/99 are forecast at 38.1 million tons, up slightly as a 5-percent increase in India's exports along with a slight increase in the U.S. and Argentina offsets smaller exports by Brazil. In addition, Egypt and Taiwan are expected to enter the export market following reports of new soybean crush facilities that will come on line in the 1998/99 marketing year. The global soybean meal import projection of 37.9 million tons reflects an increase in forecast import demand in China and the Middle East. Low world soybean meal prices are expected to support larger imports and consumption than last year, although the rate of growth will fall significantly. The global soybean oil situation for 1998/99 reflects increased import demand with a 7 percent increase in Mexico's import forecast to 115,000 tons. The 1998/99 soybean oil export forecast is raised slightly with an increase in the U.S. and Argentina. In addition, larger supplies in both countries raise September 1999 global ending stocks to 2.4 million tons.
Soybean Highlights
China's 1998/99 soybean production estimate was reduced 200,000 tons to 13.8 million tons due to excessive moisture in the primary soybean growing areas of the Northeast. While the flooding has not destroyed a significant amount of soybean area, isolated yield losses are expected. China's soybean import estimate was increased 200,000 tons to 3.5 million tons to account for the production decline. Soybean imports are expected to begin the marketing year at a brisk pace due to declining vegetable oil availabilities.
Other Oilseeds
World oilseed production for 1998/99, excluding soybeans, was increased 278,000 tons in September to 134.4 million tons. Increased world rapeseed, sunflowerseed, and peanut production forecasts more than offset a decline in forecast cottonseed production. The world cottonseed production forecast was reduced 177,000 tons this month to 33.0 million tons based on reductions in the United States and China. The U.S. production forecast was reduced 243,000 tons to 4.6 million tons due to an expected decline in area harvested and lower yields. Cotton area in the U.S. was reduced the lowest level since 1987 while yields are forecast to be the lowest since 1995. Lower production in China is expected due to losses from recent flooding.
Rapeseed production is forecast to reach 36.3 million tons, up 200,000 tons this month based on increases in Australia and Poland. Australian production is forecast to reach 1.6 million tons this year, nearly double the level reached in 1997/98. Forecast sunflowerseed production was increased 175,000 tons to 26.5 million tons based on an increase in Argentina's production to 6.7 million tons. This was up 450,000 tons in September and places the crop 28 percent above last year. Offsetting this increase was a 250,000 ton decline in Romania's sunflowerseed production to 850,000 tons, nearly unchanged from 1997. The world peanut production forecast was increased 72,000 tons this month to 27.6 million tons based on an increase in production in the United States. U.S. production is forecast to reach 1.6 million tons in 1998, up 67,000 tons for the month in response to an increase in forecast area harvested.
The world oilseed export forecast for 1998/99, excluding soybeans, was increased 125,000 tons to 13.9 million tons primarily due to an increase in Australia's rapeseed export forecast. The expected larger Australian rapeseed crop coupled with its proximity to Asian markets is expected to double exports in 1998/99 to 1.1 million compared to the previous year. Other oilseed crush, which excludes soybean crush, was reduced 321,000 tons this month to 106.8 million tons due to an expected decline in cottonseed crush in 1998/99. Total world cottonseed crush is forecast to reach 25.5 million tons in 1998/99, down 557,000 tons from the previous months forecast and 2.4 percent below the 1997/98 level. The United States is expected to account for most of the decline in cottonseed crush with forecast crush lowered 499,000 tons this month to 2.4 million tons or 31 percent below 1997/98. Offsetting part of this decline were increases in forecast sunflowerseed and rapeseed crush, up 169,000 and 61,000 tons respectively for the month. Increases are expected primarily in Poland for rapeseed and Argentina for sunflowerseed. The world oilseed ending stocks forecast for 1998/99, excluding soybeans, was increased 117,000 tons this month in response to increases in forecast world peanut and rapeseed stocks.
World protein meal production, excluding soybean meal, was reduced 136,000 tons in September to 58.9 million tons. This reduction is in response to lower world cottonseed production and crush forecasts for the coming year. Partially offsetting the decline in cottonseed, forecast sunflowerseed and rapeseed meal production were raised this month. Sunflowerseed meal production is forecast to reach 10.3 million tons in 1998/99, up 100,000 tons from the August forecast while rapeseed meal production is forecast to reach 19.8 million tons, up 19,000 tons from the previous month. Sunflowerseed and rapeseed meal production are expected to be 6 and 4 percent higher, respectively, than in 1997/98 and contrasting an expected 1 percent decline in cottonseed meal production.
Forecast exports of other protein meals, which excludes soybean meal, were increased 131,000 tons to 16.2 million tons in response to increased sunflowerseed meal exports, primarily by Argentina. Though cottonseed meal production is expected to fall, the reduction in world trade is expected to be small as most of the shortfall will come from local consumption. Total world protein meal consumption, excluding soybean meal, is forecast 264,000-tons lower this month reflecting the expected decline in world cottonseed meal production. The world ending stocks forecast for protein meals, excluding soybean meal, was nearly unchanged this month at 1.7 million tons.
World vegetable and marine oil production, excluding soybean oil, was increased 139,000 tons this month to 57.0 million tons primarily due to increases in forecast palm, sunflowerseed, and rapeseed oil production. Cottonseed oil production is forecast lower this month at 3.8 million tons due to the lower expected crush. Total forecast world vegetable and marine oil exports for 1998/99, excluding soybean oil, were up 63,000 tons to 23.6 million tons this month in response to increased sunflowerseed oil exports. Total vegetable and marine oil consumption, excluding soybean oil, was also increased this month rising 67,000 tons to 57.0 million tons. The ending stocks forecast for 1998/99, excluding soybean oil, was increased 73,000 tons this month to 4.0 million tons with nearly all of the increase resulting from increased rapeseed and coconut oil stocks.
Other Oilseed Highlights
Australia's 1998/99 rapeseed production estimate was increased 200,000 tons from last month's estimate to a record 1.6 million tons. Last year's rapeseed crop weighed in at 860,000 tons in comparison. The majority of the increase in production will likely be exported as seed, with rapeseed exports doubling to 1.1 million tons in 1998/99. Including small upward revisions in the 1998/99 cottonseed and sunflower crop estimates, Australia's total oilseed production will increase over 800,000 tons, or 40 percent compared to 1997/98.
The 1998/99 sunflowerseed production estimate in Romania was reduced 250,000 tons to
850,000 tons. Bulgaria's sunflowerseed production is forecast 70,000 tons lower at 480,000 tons. The reduced estimates for both countries were due to drought conditions. The small production necessitated corresponding reductions in sunflowerseed crush in 1998/99 and reduced sunflowerseed meal and oil production.
Poland's 1998/99 rapeseed production forecast was adjusted 100,000 tons higher to 1 million tons due to favorable weather conditions. Poland's rapeseed crush estimate, along with rapeseed meal and oil production forecasts, were increased 17 percent reflecting the increase in production.
Jim L. Matthews (202) 720-5448
Floudia Bradley (202) 720-2257
William V. George (202) 720-6234
George Douvelis (202) 720-2494
Kwamena Cudjoe (202) 720-0141
Robert Hanson (202) 690-2581
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