New Crop U.S. Soybean Sales Fall on Surging SouthAmerican Exports

As of the beginning of August, U.S. outstanding sales for the next marketing year are running at only half the volume observed over the past two years. This is the slowest pace of new crop sales since 2008 and has occurred despite ample supplies and growing China demand.

Several factors have contributed to the slow sales seen thus far. September 1 U.S. stocks are forecast to be over twice as large as observed in the previous year. These abundant stocks reduce the risk that buyers face in securing supplies, making it less critical to book sales in advance. Additionally, the United States is facing strong competition from record South American supplies. The weakening Brazilian real has continued to spur sales while Argentina's exports are up significantly from last year. With record monthly South American exports expected through September, early season U.S. sales are expected to remain sluggish.

OVERVIEW

2015/16

Global soybean production is raised this month as a higher U.S. yield resulted in a larger production forecast. Global rapeseed production is adjusted lower due to reduced forecasts for Canada, Australia, the EU, Belarus, and Ukraine. Soybean trade is forecast to reach new highs despite the lower U.S. forecast, as record South American supplies and lower prices spur additional sales. Significant increases in sales to China, the EU, and Iran are anticipated. Global soybean stocks are reduced, reflecting strong growth in protein meal and vegetable oil consumption. The U.S. seasonaverage farm price is reduced to $9.15/bu.

2014/15

Global soybean production is up as record yields pushed Argentina's production estimate higher. Global exports are raised in response to Brazil's record export pace and rebound in Argentina trade. Larger purchases by China, the EU, and Iran led the way. Global soybean ending stocks are reduced in response to growing consumption and trade. The U.S. season-average farm price is unchanged.

SOYBEAN PRICES

U.S. export bids, FOB Gulf, in June averaged $404/ton, up $15 from last month.

As of the week ending July 30, U.S. 2014/15 soybean commitments (outstanding sales plus accumulated exports) to China totaled 29.8 million tons compared to 28.1 million a year ago. Total commitments to the world are 50.6 million tons, compared to 46.1 million for the same period last year.

2014/15 TRADE OUTLOOK

  • Argentina
    • Soybean exports are raised 1.6 million tons to 9.6 million reflecting surging export volumes in the past couple months.
    • Soybean meal exports are up 450,000 tons to 27.9 million on an increase of exportable supplies due to strong producers' sales and growing crush.
    • Sunflowerseed meal exports are increased 155,000 tons to 500,000 on growing crush and exportable supplies.
    • Soybean oil exports are up 140,000 tons to 4.7 million reflecting a strong pace of trade and larger supplies.
    • Sunflowerseed oil exports are raised 100,000 tons to 475,000 on growing exportable supplies.
  • Bangladesh palm oil imports are raised 100,000 tons to 1.4 million on strong imports and rising domestic vegetable oil consumption.
  • Brazil
    • Soybean exports are raised 3.0 million tons to 49.8 million on a stronger pace of trade to date, encouraged by a weak real and strong demand from China.
    • Soybean imports are cut 125,000 tons to 275,000 as domestic supplies are more than sufficient.
    • Soybean meal exports are up 400,000 tons to 15.0 million, reflecting the current pace of trade.
  • China
    • Soybean imports surge 3.0 million tons to 77.0 million on the accelerated pace of trade with South America.
    • Rapeseed imports are raised 300,000 tons to 4.5 million reflecting an increased volume of oilseed imports relative to products.
    • Soybean meal exports are lowered 300,000 tons to 1.7 million on a slower pace of trade to date due to reduced competitiveness compared to South American meal.
  • Egypt
    • Sunflowerseed oil imports are slashed 250,000 tons to 350,000 reflecting a slower pace of trade to date and shrinking availability of sunflowerseed oil in the global market.
    • Palm oil imports are raised 125,000 tons to 1.6 million on trade to date.
    • Soybean oil imports are up 100,000 tons to 400,000 reflecting pace of trade.
  • European Union
    • Soybean imports are increased 500,000 tons to 13.5 million reflecting growing crush and greater demand for protein feed.
    • Rapeseed imports are reduced 200,000 tons to 2.3 million on larger production and a slower pace of trade towards end of the marketing season.
  • India palm oil imports are raised 200,000 tons to 9.2 million on growing demand for vegetable oil.
  • Indonesia palm oil exports are up 1.0 million tons to 24.0 million on stronger trade to date and greater availability due to lower domestic production of biodiesel.
  • Iran
    • Soybean imports are raised 250,000 tons to 950,000 due to growing availability of soybeans in the global market and growing domestic crush.
    • Soybean meal imports are trimmed 150,000 tons to 2.2 million on larger domestic meal production due to growing crush.
    • Soybean oil imports decline 100,000 tons to 400,000 on larger domestic oil production due to growing crush.
  • South Korea soybean imports are up 100,000 tons to 1.3 million reflecting larger volumes of imports in the second half of the marketing year.
  • Malaysia palm oil imports and exports are both raised 200,000 tons to 800,000 and 17.4 million, respectively.
  • Philippines palm oil imports are increased 200,000 tons to 600,000 to reflect declining coconut oil consumption and growing palm oil use.
  • Ukraine soybean exports are up 200,000 tons to 2.3 million on a stronger pace of trade and larger exportable supplies due to lower crush.

2015/16 TRADE OUTLOOK

  • United States
    • Soybean exports are reduced 1.4 million tons to 46.9 million on the slow pace of new-crop sales and stiff competition from Brazil and Argentina
    • Rapeseed imports are down 136,000 tons to 771,000 in response to lower production in Canada.
    • Rapeseed meal imports are lowered 199,000 tons to 3.2 million due to lower Canadian supplies.
  • Argentina soybean exports are up nearly 1.1 million tons to 9.8 million on anticipated stronger export demand.
  • Brazil
    • Soybean exports are raised 3.8 million tons to 54.5 million reflecting larger global demand.
    • Soybean imports are slashed 200,000 tons to 250,000 on large domestic supplies.
    • Soybean meal exports are up 400,000 tons to 15.2 million on a stronger trade forecast.
  • Canada rapeseed exports are reduced 700,000 tons to 7.4 million reflecting a lower production forecast.
  • China
    • Soybean imports surge 1.5 million tons to 79.0 million on growing domestic crush and protein feed demand.
    • Rapeseed imports are down 300,000 tons to 3.3 million reflecting larger domestic use of soybeans and tighter global rapeseed supplies.
    • Soybean oil imports drop 350,000 tons to 950,000 on larger domestic oil production due to larger crush.
    • Rapeseed oil imports are reduced 100,000 tons to 800,000 to reflect larger consumption of soybean oil.
  • Colombia soybean meal imports are raised 100,000 tons to 1.2 million on the stronger pace of trade.
  • Egypt
    • Sunflowerseed oil imports are down 300,000 tons to 450,000 reflecting tighter global supplies of sunflowerseed oil and anticipated larger consumption of palm and soybean oil.
    • Palm oil imports are up 250,000 tons to 1.6 million.
    • Soybean oil imports are raised 110,000 tons to 400,000.
  • European Union
    • Soybean imports are up 400,000 tons to 13.5 million, reflecting increasing crush and growing demand for protein feed amid lower rapeseed and sunflower production forecast.
    • Soybean meal imports are raised 200,000 tons to 20.3 million to offset lower domestic production of rapeseed meal.
    • Rapeseed imports are down 200,000 tons to 2.2 million, reflecting decreasing availability of rapeseed in the global market.
    • Sunflowerseed exports are reduced 100,000 tons to 500,000 on lower domestic production.
    • Palm oil imports are up 150,000 tons to nearly 7.0 million to offset a cut in domestic vegetable oil production.
  • India
    • Soybean oil imports grow 150,000 tons to 2.8 million, reflecting increasing demand for vegetable oil and tight rapeseed oil supplies in the global market.
    • Palm oil imports are raised 100,000 tons to 9.7 million on growing demand for vegetable oil.
    • Rapeseed oil imports are down 150,000 tons to 200,000 on reduced global availability of rapeseed.
  • Indonesia palm oil exports jump 800,000 tons to 24.8 million on larger exportable supplies as industrial use is adjusted lower.
  • Iran soybean imports are raised 400,000 tons to 1.2 million due to growing domestic crush. As a result, soybean meal imports are trimmed 250,000 tons to 2.1 million and soybean oil imports are down 115,000 tons to 400,000.
  • South Korea soybean imports are up 100,000 tons to 1.3 million reflecting growing domestic crush.
  • Malaysia palm oil exports are raised 100,000 tons to 18.1 million on larger exportable supplies as growth in industrial consumption is adjusted lower.
  • Pakistan rapeseed meal exports are down 140,000 tons to 10,000 on lower domestic crush.
  • Philippines palm oil imports are up 200,000 tons to 600,000 reflecting decreasing coconut oil consumption and growing palm oil use.
  • Russia soybean imports are up 100,000 tons to 1.9 million on growing domestic crush and demand for protein feed.
  • Ukraine
    • Soybean exports are increased 400,000 tons to 3.0 million on larger production.
    • Rapeseed exports are reduced 100,000 tons to 1.4 million on lower production.