Large Oilseed Carry-Over Provides Plentiful Supplies in 2015/16

Global oilseed supplies are forecast to rise three percent in 2015/16, a more modest expansion than seen over the previous two years. The larger supply is a result of record carry-over, as production is expected to fall slightly from the 2014/15 record. Soybeans represent 86 percent of the total carry-over and 60 percent of total oilseed production. The stable soybean production and larger sunflower and peanut crops only partially offset reduced rapeseed and cottonseed production.

Global oilseed demand is forecast to rise, yet at a slightly slower pace than the five-year average. Soybean crush is forecast to grow five percent, on par with the past two years and above the level of a few years ago when high prices and tight supplies were limiting factors. Other oilseed crush is forecast to decline slightly in the coming year, mostly on reduced rapeseed and cottonseed crush where production growth is more limited. While overall soybean demand is forecast to grow in 2015/16, it still falls short of production and is the primary reason that global oilseed ending stocks are forecast to rise in the coming year. Ending stocks of other oilseeds, with the exception of peanuts, are expected to decline.

Global protein meal consumption is forecast to rise slightly in 2015/16 due to demand in China and other major markets. Growing soybean meal demand, which accounts for nearly 70 percent of global consumption, is the main driver as use of other oilseed meals is forecast to remain mostly unchanged. Total protein meal consumption is expected to grow 3 percent with 85 percent of the growth attributed to soybean meal. Consumption of the other main oilseed meals, sunflowerseed, rapeseed and cottonseed, will be mostly flat to lower. Trade in protein meals is also forecast to increase, led by relatively strong growth in soybean meal exports.

Food consumption of the nine major vegetable oils is forecast to expand 4 percent in 2015/16, reflecting population and GDP growth. Palm oil consumption continues to grow in line with increasing production and is forecast to account for nearly 60 percent of total oil use. Industrial use of vegetable oil is forecast to rise in response to continued expansion in the oleo-chemical industry and domestic bio-diesel mandates in Indonesia and Malaysia. Availability of soybean oil is forecast to increase in line with growing crush, while supplies of sunflowerseed and rapeseed oil will remain stable. Overall, vegetable oil consumption will exceed production, leading to an 8 percent decline in ending stocks, the lowest in 5 years.

OVERVIEW

2015/16

Global soybean production is expected to remain nearly unchanged from the previous year. Import demand is forecast to rise, driven by China and the EU. Brazil's exports are forecast to exceed those of the United States, aided by a favorable exchange rate and record supplies. Global supply growth is forecast to exceed demand, leading to additional stock building. Soybean meal trade is forecast to rise, driven by demand in the EU and Southeast Asia. Soybean oil trade is expected to grow, largely on India's expanding demand. The U.S. season-average farm price is projected lower at $9.00 per bushel.

2014/15

Global soybean production is raised on a larger crop in Argentina. Exports from Brazil are lowered, while U.S. exports are raised and expected to reach a new record. China imports have been reduced. Global stocks are lowered, based on a series revision affecting Argentina stocks. The U.S. seasonaverage farm price is reduced to $10.05 per bushel.

SOYBEAN PRICES

U.S. export bids, FOB Gulf, in April averaged $388 per ton, down $1 from last month.

As of the week ending April 30, U.S. 2014/15 soybean commitments (outstanding sales plus accumulated exports) to China totaled 29.9 million tons compared to 27.6 million a year ago. Total commitments to the world are 49.4 million tons, compared to 44.6 million for the same period last year.

Significant adjustments in Argentine soybean stocks beginning in 2011/12

Over the past few years, the unique circumstances that have characterized the Argentine economy have led to significant holding of soybeans by producers. USDA has been using a traditional accounting of trade and crush, along with historical trends in domestic use, which has resulted in relatively high stocks estimates. Recent indications suggest that significant quantities of soybeans may be disappearing in the domestic market, lost through spoilage or through other marketing channels. This month, a series revision beginning in 2011/12 is made to account for this residual use.

As a result, the current estimates of April 2015 (2014/15 local marketing year) beginning stocks have been lowered around 3 million tons to 10.8 million. Higher residual use is also assumed for 2015/16.

2015/16 OUTLOOK

  • Global soybean production in 2015/16 is expected to remain nearly unchanged at 317 million tons. Harvested area is expected to grow 2 percent with increases in all major producing countries except China where domestic policies still favor alternative crops. Elsewhere, continued strong soybean prices relative to competing crops along with lower soybean input costs spur additional plantings. With near record production, global supplies will continue their ascent with the addition of record carryover from 2014/15. Total supplies are forecast to approach a record 403 million tons. Global demand is forecast to strengthen aided by sub-ten dollar prices. However, supply growth is expected to exceed demand for another year leading to record ending stocks. Global trade is forecast to rise with China continuing to account for roughly 80 percent of the increase in imports. The United States and Brazil will remain the largest exporters accounting for a combined 80 percent market share. Brazil's exports are expected to exceed those of the United States aided by a favorable exchange rate and record supplies.
  • Global soybean meal trade is forecast to grow 5 percent in 2015/16, encouraged by lower prices and growing imports by the European Union. In Europe, production of rapeseed and sunflowerseed are forecast to decline leading to a greater reliance on imported soybean meal. Much of this is expected to originate from Argentina where this year's record crop and growing producer sales will provide plentiful supplies for export. Similarly, India's meal exports should rebound with better soybean production prospects. However, export volume will remain below historical norms due to growing domestic demand. Soybean oil exports are also forecast to grow in 2015/16 with Argentina capturing much of the growth. Slowing expansion in bio-diesel demand, a response to lower petroleum prices, will free up additional oil for the food market. Lower vegetable oil prices also encourage additional consumption as consumers can trade up in oil purchases from less expensive palm oil, while still realizing a savings.
    • U.S. soybean exports are projected to decline 680,000 tons to 48.3 million, meal exports are forecast lower at 10.7 million, down 952,000 tons, while oils exports are raised 45,000 tons to 907,000.
    • Argentina's soybean exports are projected to rise 500,000 tons to 8.5 million, meal is up 2 million to 31.0 million, and oil is up 575,000 tons to 5.1 million.
    • Brazil's soybean exports are projected up 4.1 million tons to 49.8 million, meal exports are forecast to climb 525,000 tons to 14.5 million, and oil exports are expected to rise 80,000 tons to 1.3 million.
    • China's soybean imports are projected up 4 million tons to 77.5 million, while meal exports fall 400,000 tons to 1.6 million. Oil imports are forecast to rise 300,000 tons to 1.3 million.
    • EU's soybean imports are projected to remain steady at 12.8 million tons with meal imports rising 800,000 tons to 20.1 million.
  • Global rapeseed production is forecast to decline 3.5 million tons in 2015/16 as a slight decrease in area reduces total output to 68.1 million tons. Area is forecast to decline in most major producing countries where large stocks remain from previous harvests. The exception is India where area and production are forecast to rise following last season's smaller crop. Rapeseed trade is forecast to decline as a large carryover will reduce import demand in China and the European Union, causing a drop in Canada and Ukraine exports. Canada's crush is expected to remain nearly unchanged at 7.1 million tons as competition from growing soybean meal and oil supplies in the United States limits growth in their primary export market.
    • U.S. rapeseed imports are projected up 90,000 tons to 929,000; meal nearly unchanged at 3.4 million, and oil up 75,000 tons to 1.6 million.
    • Canada's rapeseed exports are projected to decline 600,000 tons to 8.2 million tons, meal unchanged at 3.5 million tons, and oil up 70,000 tons to 2.5 million.
    • China's rapeseed imports are projected down 500,000 tons to 3.6 million and oil up 50,000 tons to 900,000.
  • Global sunflowerseed production in 2015/16 is expected to remain steady at 39.9 million tons. Crush is forecast to grow 1 percent as Russia and Argentina increase processing to satisfy demand for meal and oil in export markets. Expanded crush volumes in Argentina and Russia more than offset reduced crush in Ukraine and the EU. Global stocks at the end of 2015/16 are forecast to decline 29 percent to 1.7 million tons. Global trade of sunflowerseed meal is forecast to increase slightly driven by strong demand in the European Union. Global sunflowerseed oil trade is forecast to rise, supported by strong demand in India, the Middle East, and the EU. Global stocks of oil at the end of 2015/16 are expected to fall 26 percent to 1.2 million tons.
    • Ukraine's meal exports are projected down 50,000 tons to 3.7 million with oil down 100,000 tons to 3.6 million.
    • Russia's meal exports are projected unchanged at 1.5 million tons, while oil exports are projected to climb 50,000 tons to 1.5 million.
    • EU meal and oil imports are forecast to rise 50,000 tons each to 3.4 million and 900,000 tons, respectively.
    • China's and India's oil imports are projected flat at 400,000 tons and 1.5 million tons respectively.
    • U.S. sunflowerseed exports remain steady at 123,000 tons.
  • Global palm oil production in 2015/16 is forecast to exceed the prior year's record by 6 percent, with Malaysia expected to rebound following this year's production decline. Palm oil remains the dominant food oil, representing a third of total vegetable oil consumption. In addition, industrial applications for palm oil are expanding, particularly in Indonesia and Malaysia. With lower petroleum prices, the demand for imported biodiesel has slowed leading Indonesia to aggressively promote further domestic consumption. Global palm oil trade is forecast to rebound from the prior year's contraction, reaching a new record primarily on rising demand in South and East Asia.
    • Indonesia's exports are forecast up 1.0 million tons to 23.5 million, while Malaysia's are up 800,000 tons to 18.0 million.
    • India's imports are forecast up 600,000 tons to 9.5 million; China's are up 450,000 tons to 5.8 million, Pakistan's are up 250,000 tons at 3.0 million; Bangladesh's are up 150,000 to 1.4 million tons, while EU is unchanged at 6.8 million.
  • Global palm kernel production in 2015/16 is up, reflecting the larger oil palm crop. Trade remains relatively small as most seed is crushed locally. Palm kernel meal trade is forecast to rise with New Zealand emerging as the largest importer due to continued growth in their dairy industry. In contrast, EU imports are expected to remain flat, reflecting ample supplies of alternative feed ingredients. Palm kernel oil imports are forecast to grow modestly on account of growing markets in China and India.
    • Indonesia's meal exports are up 200,000 tons to 4.1 million, and oil exports up 50,000 tons to 1.7 million.
    • Malaysia's meal exports are up 50,000 tons to 2.5 million, while oil exports are unchanged at 1.1 million tons.
    • EU meal and oil imports remain steady at 2.1 million and 580,000 tons, respectively.
    • New Zealand's meal imports are up 200,000 tons to 2.4 million.
    • China's oil imports are up 75,000 tons to 650,000, while U.S. imports remain steady at 304,000 tons.
  • Global copra production in 2015/16 is forecast to increase slightly, mostly on an improved harvest in the Philippines. Global trade remains small at less than 100,000 tons and is expected to decline slightly on reduced trade from Indonesia. Copra crush is forecast to rise with larger production leading to a modest increase in meal and oil. However, output is expected to remain below the earlier levels as the impact of Typhoon Haiyan in the Philippines continues. Copra meal and coconut oil trade are forecast to remain relatively flat. Growing demand for coconut oil, with limited prospects for increasing trade, will continue to pressure stocks lower and help keep premiums for coconut oil strong.
    • Philippine copra meal and coconut oil exports are unchanged at 500,000 and 800,000 tons, respectively.
    • Indonesia's copra meal exports are unchanged at 230,000 tons, and coconut oil is increased by 10,000 tons to 690,000.
    • South Korea's copra meal imports are 20,000 tons higher to 440,000.
    • EU coconut oil imports are raised 10,000 tons to 570,000, while the United States remains unchanged at 556,000 tons.
  • Global peanut production in 2015/16 is forecast to approach the record 41.1 million tons set in 2013/14. This is 1.9 million tons higher than last year and reflects a rebound in India and Sudan. More modest production growth is forecast for China, Argentina and the United States. Global peanut trade is expected to recover with the increased supplies as exports are forecast to rise 219,000 tons to 2.9 million. Import growth is expected to climb in line with historical trends leading to an increase in global ending stocks to a record 2.5 million tons.
    • U.S. exports are forecast to rise slightly to 528,000 tons.
    • Argentina's exports are up 50,000 tons to 750,000 on higher supplies.
    • China's exports are up 80,000 tons to 530,000.
    • India's exports are up 75,000 tons to 650,000 due to increased supplies.
    • EU peanut imports are nearly unchanged at 825,000 tons.
  • Weakness in the global cotton market is forecast to reduce cotton area and cottonseed production in 2015/16, with the most significant declines in China. Global cottonseed production is forecast to fall to 42 million tons, the lowest in 5 years as all major producers are forecast to have significantly smaller crops. Cottonseed crush is down, leading to reduced supplies of meal and oil.
    • Australia's cottonseed exports are down 50,000 tons to 300,000.
    • U.S. cottonseed exports are down 45,000 tons to 204,000.
  • Global olive oil production is forecast to recover in 2015/16 and reach 2.9 million tons. Supplies in the EU are expected to be sufficient to meet domestic and export demand. U.S. imports are forecast to increase slightly after falling in 2014/15 in response to the shortage in EU production and the sharp increase in price. Global stocks at the end of 2015/16 are forecast to grow nearly 50 percent to 171,000 tons.
    • EU exports are up 40,000 tons to 600,000, while Tunisia's are forecast to drop 80,000 tons to 150,000.
    • U.S. imports are projected to increase 5,000 tons to 311,000.
  • Global fish meal production and trade is expected to remain relatively flat in 2015/16. Peru's catch is forecast to remain nearly unchanged, yet continue below historical norms. Demand growth is forecast to continue in Asia, although the premium for fishmeal over alternative protein meals is expected to remain high.
    • Peru's exports are down 25,000 tons to 825,000.
    • Chile's exports are up 5,000 tons to 275,000.
    • China's imports are raised 50,000 tons to 950,000.

2014/15 TRADE OUTLOOK

  • United States soybean exports are up 272,000 tons to 49.0 million on strong export commitments.
  • Argentina's soybean meal exports are up 155,000 tons to 29.0 million due to increased crush and availability of meal.
  • Brazil's
    • Soybean exports are cut 350,000 tons to 45.7 million on relatively weak early season exports.
    • Soybean meal exports are down 150,000 tons to 14.0 million on a weaker export pace.
  • Canada's rapeseed oil exports are lowered 250,000 tons to 2.4 million on lower monthly imports.
  • China's
    • Soybean imports are lowered 500,000 tons to 73.5 million on a slower pace of trade.
    • Soybean meal exports are raised 200,000 tons to 2 million on stronger exports to the Southeast Asia.
    • Palm oil imports are down 400,000 tons to 5.3 million on markedly lower monthly imports.
  • India's soybean meal exports are down 100,000 tons to 1.4 million on strengthening domestic use and limited prospects for exports, given the relatively high prices.
  • Iran's soybean imports are increased 250,000 tons to 500,000 on recent trade trends. Soybean meal and oil imports were reduced in concert, leaving total soybean meal and oil consumption unchanged.
  • Malaysia's palm oil imports are raised 225,000 tons to 600,000 on additional import demand in the first part of the year as production lagged.
  • Philippines' palm oil imports are up 370,000 tons to 400,000. The import and consumption series were revised from MY 2000/01 to present to reflect data and trends from trade partners.
  • South Korea's soybean imports are down 100,000 tons to 1.2 million, while soybean meal imports down 180,000 tons to 1.7 million on reduced protein meal demand and limited trade to date.
  • Thailand's palm oil exports were cut by half to 200,000 tons, reflecting higher domestic use and limited supplies.
  • Turkey's
    • Sunflowerseed imports are cut 200,000 tons to 500,000 on weaker trade to date.
    • Soybean meal imports are cut 140,000 tons to 600,000, while soybean imports are raised 300,000 tons to 2.1 million on increasing crushing capacity as well as protein feed demand.
    • Soybean exports are raised 100,000 tons on growing trade with Iran.
  • Tunisia's olive oil exports are up 120,000 tons to 230,000 on a higher olive crop.
  • Vietnam's soybean meal imports are up 250,000 tons to 3.8 million on continued strengthening of feed demand for the livestock, poultry, and aquaculture industries.