OVERVIEW

Global soybean production is up this month as larger estimates for Argentina and Ukraine more than offset lower production in South Africa. Exports are raised on greater shipments from Ukraine. Global stocks are raised this month, reflecting growing supplies in Argentina as well as reduced crush estimate in the United States. The U.S. season-average farm price is unchanged.

SOYBEAN PRICES

U.S. export bids in January, FOB Gulf, averaged $355/ton, up $4 from last month.

As of the week ending January 28, U.S. 2015/16 soybean export commitments (outstanding sales plus accumulated exports) to China totaled 25.1 million tons compared with 28.5 million a year ago. Total commitments to the world are 40.6 million tons, compared with 45.4 million for the same period last year.

2015/16 TRADE CHANGES

  • United States soybean meal exports are reduced 454,000 tons to 10.2 million in response to stronger competitive pressure from South America.
  • Argentina soybean meal exports are up 500,000 tons to 31.8 million in response to a larger crush that reflects this month's higher crop forecast.
  • Australia rapeseed exports are lowered by 150,000 tons to 2.5 million reflecting lower carry-over stocks from the previous marketing year, a result of an increase in final year trade.
  • Canada rapeseed exports are increased by 300,000 tons to 9.0 million driven by elevated EU demand and reduced competition from Australia.
  • EU rapeseed imports are raised 200,000 tons to 2.4 million on a stronger than expected pace of trade in the first half of the marketing year.
  • India
    • Soybean meal exports are lowered 100,000 tons to 150,000 as strong domestic demand further limits export availability.
    • Rapeseed meal exports are slashed 100,000 tons to 200,000 to partially offset a drop in peanut meal production.
    • Soybean oil imports are raised 100,000 tons to 3.7 million to offset lower peanut oil production.
    • Palm oil imports are increased 100,000 tons to 9.6 million because of strong domestic demand for all vegetable oils.
  • Malaysia palm oil exports are lowered 100,000 tons to 18.0 million reflecting tighter supplies following a smaller than expected harvest in 2016.
  • Ukraine
    • Soybean exports are up 100,000 tons to 2.2 million, reflecting a larger crop estimate.
    • Sunflower seed meal and oil exports are each boosted 100,000 tons to 4.1 million, on higher crush as sunflower seed production expands.

U.S. Peanut Butter Exports Grow in Importance and Market Share

U.S. peanut butter is a small but important conduit by which U.S. peanuts enter the global market. Peanut butter accounts for nearly 20 percent of total peanut export disappearance. Assuming a conversion rate of 2 kilograms of peanuts per kilogram of peanut butter, U.S. peanuts exported as peanut butter, either from the United States or indirectly through Canada, totaled approximately 105,000 tons (inshell basis) in calendar year 2015. Over time, it's likely that peanut butter exports will grow in importance as part of the overall disappearance of U.S. peanuts in the international market.

The United States has always been a major player in global peanut butter trade and continues to be the world's largest exporter. China is the chief competitor and, together with the United States, the two countries account for nearly 80 percent of peanut butter trade. Over the past 6 years, the U.S. share of global trade (U.S. plus net Canada exports) has risen from 45 to 55 percent in a market that has grown more than 60 percent over the same period. This translates into an increase of approximately 50,000 tons, a doubling of peanut butter exports produced from U.S. peanuts since 2009.

This acceleration in peanut butter exports is a relatively recent event and reflects the changing dynamics in the global market. In the years between 1995 and 2003, there was little growth in U.S. peanut butter exports. Most of the growth in global peanut butter consumption was supplied by China, with its exports approaching the level of the United States by 2003. Both U.S. and China's peanut butter exports continued to grow steadily for the next 5 years, as global consumption continued to expand.

By the beginning of this decade, however, China's export growth slowed in response to a growing domestic demand for peanuts and peanut oil. This has allowed U.S. producers to expand their market share in a larger global peanut butter market. In fact, the entire growth in global peanut butter demand since 2010 has been supplied by U.S. products. Net export growth from other suppliers has been negligible as larger exports from the EU and India offset declines in China and Argentina.

Given current trends in the market, the United States is in a favorable position for continued export growth. The degree of U.S. growth in peanut butter exports will reflect any overall expansion of the global market.

Note: U.S. peanut butter exports include both U.S. exports and net exports from Canada. As the primary supplier of peanuts to Canada, it is assumed that most of the peanut butter exported by Canada is produced with U.S. peanuts. Canada is a significant exporter of peanut butter to the United States and these exports are excluded in global trade totals. U.S. peanut butter exports are assumed to meet the demand of the Canadian domestic market, supplementing peanut butter produced in Canada. Peanut butter exports by Canada, excluding shipments to the United States, total an estimated 4,500 tons in 2015 with a majority of these exports destined for Saudi Arabia.

Note: Reference to peanut butter also includes peanut paste