Situation and Outlook
U.S. oilseed production for 1998/99 is forecast at a record 84.6 million tons, up 415,000 tons from last month and up 1.5 million tons from last year. U.S. 1998/99 soybean production, reported at 75.0 million tons (2,757 million bushels), is down 158,000 tons or 6 million bushels from last month's estimate based on reduced planted and harvested area. Upward revisions in production of all other oilseeds more than offset the reduced soybean crop.
U.S. soybean ending stocks for 1998/99 are up 408,000 tons (15 million bushels) this month to 10.6 million tons (390 million bushels) as reductions in soybean exports and crush of 272,000 tons (10 million bushels) each more than offset the lower production. Increased South American production and export prospects this month are expected to offer added competition to both U.S. soybean and soybean meal exports.
U.S. soybean oil export prospects remain on track as prospective larger South American exports are offset by increased imports of soybean oil in India and some North African and Central American countries. Domestic soybean oil consumption is increased this month based on strong year-to-date disappearance and a strong offtake trend in the past 2 years following relatively flat growth in the early 1990's. Domestic soybean meal use is unchanged this month; strong year-to-date disappearance is expected to be offset by slower growth next summer as producers cut back hog feeding.
U.S. soybean prices are forecast at $5.10 to $5.60 per bushel, off 10 cents from last month. Soybean meal prices are lowered $130 to $150 per ton, off $5, while soybean oil prices are down slightly at 25 to 27 cents per pound.
Global oilseed production for 1998/99 is projected at a record 289.4 million tons, up 1.4 million tons from last month and up 4.2 million from last year. Projected foreign production of 204.8 million tons is up 1.0 million tons from last month. Increases for Brazil and Argentina of 500,000 tons each more than offset a 200,000-ton decline in the Indian soybean crop. Crop conditions are generally favorable as of early January for most of South America. Recent rains have increased yield prospects, but some dry areas in Argentina and extreme southern Brazil pose a minor concern. Global oilseed stocks are increased slightly, mainly reflecting slightly larger U.S. and Brazilian soybean stocks and a reduction in rapeseed stocks in Canada.
World soybean production in 1998/99 was increased slightly to 154.8 million tons reflecting a larger crop forecast for Argentina and Brazil that more than offset the decline in the U.S. soybean crop. Argentina's soybean production forecast was raised 500,000 tons in response to higher yields from recent improvements in weather conditions. In addition, higher yields in Brazil caused a 500,000 ton increase in its crop forecast. Reduced area in India caused a 200,000 ton reduction in its production forecast to 5.5 million tons. Forecast world soybean trade is highlighted by reduced exports in the U.S. due to stronger competition from South America. Brazil's soybean export forecast is higher with larger supplies. The world soybean import forecast is reduced this month reflecting some weakness in demand in Taiwan's livestock sector. World soybean ending stocks were raised 3 percent this month on reduced U.S. exports and crush and larger supplies in Brazil.
World soybean meal exports for 1998/99 are forecast at 38.5 million tons. Changes this month reflect larger supplies in South America and continued strong soybean meal demand in the EU. The smaller U.S. soybean meal supply and export forecast are based on stronger competition from South America. World soybean oil trade projected at 7.0 million tons reflects a larger export forecast for Brazil and Argentina in response to an increase in availabilities and stronger import demand in India, Pakistan, the Middle East and North Africa and Latin America.
World oilseed production for 1998/99, excluding soybeans, was increased 763,000 tons in January to 134.6 million tons in response to an increase in forecast world cottonseed production and increases in U.S. peanut, sunflowerseed, and rapeseed production. The increase in the world cottonseed production forecast is in part a response to an increase in China's cottonseed production estimate to 7.8 million tons following release of official Chinese statistics last month. However, China's total cottonseed production remains below the 1997 level as an over-supply of cotton lint in China has reduced incentives to maintain previous higher planting levels. The U.S. cottonseed production estimate for 1998 was raised 118,000 tons this month to 4.7 million tons. An increase in harvested acres accounted for most of the change. Offsetting some of the increase in cottonseed production is a 150,000-ton decline in Pakistan's production forecast to 3.2 million tons. Poor harvest conditions at the time of the second picking coupled with a re-evaluation of the previous harvest resulted in this month's reduced estimate.
Other changes this month include a 280,000-ton increase in U.S. sunflowerseed production, a 102,000-ton increase in U.S. peanut production, and a 73,000-ton increase in U.S. rapeseed production. All revisions are a result changes coming from NASS and reflect higher harvested area and/or increased yields.
The world oilseed export forecast for 1998/99, excluding soybeans, was increased 726,000 tons to 15.2 million tons in response to increased trade in rapeseed and sunflowerseed. The world rapeseed export forecast was raised 325,000 tons in response to an increase in expected imports by China in 1998/99 to 1.5 million tons. This is more than 3 times the level imported in 1997/98 and represents a return to rapeseed imports at the expense of rapeseed oil imports. Canada is expected to be the major supplier to China in 1998/99 resulting in a 250,000 ton increase in Canada's rapeseed export forecast to 3.3 million tons. The U.S. rapeseed export forecast was also increased an additional 75,000 tons this month to 250,000 tons in response to the improved export demand and increased production.
Higher sunflowerseed prices, a reflection of tight world supplies, are expected to boost Ukrainian sunflowerseed exports in 1998/99. Forecast exports of sunflowerseed by the Ukraine are expected to reach 1.1 million tons in 1998/99, an increase of 300,000 tons over the previous estimate and 200,000 tons above the 1997/98 level. Much of this additional seed is expected to be exported to the European Union to meet demand for meal and oil. The world sunflowerseed export forecast was increased 334,000 tons to 4.5 million tons.
Total world other oilseed crush, which excludes soybean crush, was increased 193,000 tons to 106.4 million tons. An increase in rapeseed crush led the way, partially offset by a decline in cottonseed crush. The increase in world rapeseed crush, up 248,000 tons to 33.5 million tons, was in response to the increase in rapeseed imports by China. Most of this additional seed is being supplied by Canada out of other uses and stocks. Lower world cottonseed crush is due mainly to lower crush forecasts for Pakistan and Argentina. China's cottonseed crush forecast remained unchanged in January as all of the additional cottonseed noted this month will be diverted to other uses. Forecast sunflowerseed crush was relatively unchanged in January as lower crush in the Ukraine was offset by increased crush forecast for the European Union.
The world oilseed ending stocks forecast for 1998/99, excluding soybeans, was increased 44,000 tons to 3.1 million tons this month as increased stocks of U.S. sunflowerseed more than offset a decline in Canada's rapeseed stock forecast.
World protein meal production, excluding soybean meal, was reduced 360,000 tons in January to 58.4 million tons. This reduction is primarily in response to a lower 1998/99 fishmeal production forecast. Fishmeal production forecasts for both Chile and Peru were reduced this month and account for a 515,000 ton decline in the world production forecast. Despite the decline, total fishmeal production in Chile and Peru is expected to rebound from the depressed "El Nino" levels experienced last year, but at a slower pace than earlier expected. Partially offsetting the decline in forecast fishmeal production for 1998/99 are increases in rapeseed and sunflowerseed meal production forecasts for 1998/99. The increase in rapeseed meal production is in response to increased crush in China while improved crush efficiencies in the European Union relative to the Ukraine will lead to a boost in crushing yields and resulting increase in sunflowerseed meal production.
Trade in other protein meals, which excludes soybean meal, is forecast lower this month in response to the reduction in fishmeal production forecasts for Chile and Peru. Total fishmeal exports for the period are reduced 515,000 tons to 3.1 million tons, but are still over 700,000 tons above the 1997/98 world export estimate of 2.4 million tons. Correspondingly, forecast world fishmeal imports for 1998/99 were also reduced this month. Total world protein meal consumption, excluding soybean meal, was reduced 374,000 tons this month to 58.3 million tons in response to the lower fishmeal production forecast. Offsetting this decline is higher rapeseed and sunflowerseed meal consumption resulting from the increase in forecast production for 1998/99. The world ending stocks forecast for protein meals, excluding soybean meal, remained unchanged at 1.7 million tons in January.
World vegetable and marine oil production, excluding soybean oil, was increased 315,000 tons this month to 56.9 million tons. An increase in sunflowerseed, peanut, and rapeseed oil production forecasts more than offset lower fish oil production this month. Total forecast world vegetable and marine oil exports for 1998/99, excluding soybean oil, were down 109,000 tons to 23.0 million tons this month primarily due to lower 1998/99 fish oil exports. Rapeseed and palm oil export forecasts were also lowered this month while the olive oil export forecast was increased. Total vegetable and marine oil consumption, excluding soybean oil, was increased 78,000 tons this month to 56.4 million tons. The ending stocks forecast for 1998/99, excluding soybean oil, was increased 410,000 tons as forecast olive oil stocks were increased to 1.2 million tons. Olive oil stocks were also increased for 1997/98 to 1.1 million tons.
Jim L. Matthews (202) 720-5448
Floudia Bradley (202) 720-2257
William V. George (202) 720-6234
George Douvelis (202) 720-2494
Mark Rassmussen (202) 690-4199
Robert Hanson (202) 690-2581