Situation and Outlook - May 2004

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Foreign Developments

World total oilseed production for 2003/04 was reduced 2.5 million tons to 335.8 million tons in May.  Forecast global soybean production was reduced 3.4 million tons to 190.1 million tons.  This is below the level reached in 2002/03 and is reflected in the current high soybean prices.   Brazil’s 2003/04 soybean production forecast was reduced an additional 2.5 million tons this month to 53.5 million tons.  Dry growing conditions in Brazil’s southern production regions continue to impact yields and reduced the year-to-year growth in soybean production to only 1.0 million tons.  This is significantly below the average annual growth rate of 6.1 million tons experienced between 1999/2000 and 2002/03.  Argentina’s soybean production forecast was also reduced this month in response to the earlier dry conditions.  Production is forecast to reach 34.0 million tons, down 1.0 million tons from the April estimate and brings forecast production below last season’s record of 35.5 million tons.  Bucking the trend for reduced South American production estimates this month, Uruguay’s soybean production forecast was increased 170,000 tons to 520,000 tons.  Higher grower returns prompted a nearly 8-fold increase in Uruguay’s soybean production since 2002.

Due to lower supplies, both soybean export and crush forecasts were reduced this month.  World soybean export volume is now expected to fall below the 2002/03 level, reaching 61.9 million tons or 800,000 tons below last month’s forecast.  Crush was also reduced 1.4 million tons in May to 171.5 million tons.  This remains a healthy increase over 2002/03 and reflects increased crush in South America and China.  Soybean crush in Europe declined slightly for 2003/04, while U.S. crush was unchanged in May, remaining nearly 4.0 million tons below the 2002/03 crush due to the reduced 2003 harvest.  Soybean stocks will also be lower in 2003/04 due to the decline in soybean production.  Stocks are forecast to reach 31.7 million tons this year, down 1.3 million tons from the April forecast.

Partially offsetting declines in soybean production in May were increases in rapeseed and cottonseed production forecasts.  India’s rapeseed and cottonseed production forecasts were raised this month.  Rapeseed production was also increased for the EU but in this case reflects the move to an EU-25 accounting and the inclusion of additional production data for some of the acceding member states that was previously unreported.

The global meal production forecast for May was reduced 543,000 tons to 196.9 million tons.  Soybean meal production was lowered nearly 1.2 million tons due to the reduced South American soybean supply situation.  Increased rapeseed meal and cottonseed meal production in India and elsewhere, along with an increase in sunflowerseed meal production helped offset some of the decline in meal production.   The global vegetable oil production forecast declined 93,000 tons in May as lower soybean oil production was mostly offset by increased rapeseed oil production.  Forecast vegetable oil exports are reduced 725,000 ton in response to lower palm oil and soybean oil trade.

U.S. oilseed production for 2004/05 is forecast at 90.2 million tons, up 19 percent from 2003/04.  Soybean production will account for most of the increase, rising 23 percent to a record 80.7 million tons.  Other U.S. oilseed production is expected to decline marginally in 2004/05 based on farmer planting intentions and trend yields. 

U.S. soybean exports are projected to reach a record 29.4 million tons in 2004/05.  The short South American crop in 2004 will result in reduced competition from Argentina and Brazil this fall that will help boost the pace of U.S. exports.  Soybean crush in the U.S. is expected to rebound to 45.3 million tons in 2004/05.  This would place crush at the second highest level on record, and reflects the expected improved supply situation and lower prices.  Exports of soybean meal and oil are also forecast to rebound from depressed 2003/04 levels but will remain below average.  Domestic disappearance of both soybean meal and oil are forecast to recover in 2004/05 and reach near historic highs.

 For additional information pertaining to the summary above and other noteworthy developments within the oilseeds complex see the reports below. All reports are in Adobe Acrobat format (.pdf) unless otherwise noted. These reports, along with others, may also be obtained in both Adobe Acrobat (.pdf) and WordPerfect format (.wpd) by going directly to the Attaché Report section of the FAS homepage at http://www.fas.usda.gov/

May 5, 2004 | Philippines | Oilseeds and Products Annual

May 4, 2004 | Argentina | Oilseeds and Products Annual

April 30, 2004 | Bangladesh | Oilseeds and Products Annual

April 28, 2004 |  Tunisia  | Oilseeds and Products Annual

April 22, 2004 |  Paraguay  | Oilseeds and Products Annual

April 20, 2004 |  Hungary  | Oilseeds and Products Annual

April 15, 2004 | Venezuela  | Oilseeds and Products Annual

April 14, 2004 |  China, People's Republic of  | Oilseeds and Products Annual Part 1 of 2

April 14, 2004 |  China, People's Republic of  | Oilseeds and Products Annual Part 2 of 2