Argentina Reopens Door to Soybean Imports

After a long period of inactivity, soybeans are once again flowing into Argentina. Since January of 2016, Argentina soybean imports, arriving mostly from Paraguay, have reached nearly 500,000 tons. While relatively modest in volume compared to peak imports in the late 2000's, it does represent the first imports of any significance in nearly six and a half years. With two months to go in the Oct/Sep year, total imports are forecast to reach near 600,000 tons.

The emergence of soybean imports is in response to legislation that temporarily lifts restrictions on imports for processing. Previously, soybeans could be imported with the resulting products reexported without incurring any export duties. With processors operating at less than 70 percent capacity, however, the industry lobbied for access to additional supplies which resulted in the lifting of import restrictions.

It is unlikely that sufficient supplies will be available in the near term to push imports to earlier levels as additional processing capacity has been added in Paraguay since the Argentina restrictions were put into place. The current surge in imports of soybeans into Argentina is likely to be a result of blending some lower quality domestic soybeans, resulting from the floods earlier in the year, with soybeans of higher protein content. As a result, forecast import volume in 2016/17 is expected to decline from the current year forecast.

Global Sunflowerseed Crush and Products Output Forecast to Grow in 2016/17

Sunflowerseed production in 2016/17 is forecast to reach a new record of nearly 43.3 million tons, up nearly 4.0 million from the current year. The bulk of the growth is projected in Ukraine and Russia, which accounts for 54 percent of global production. Record supplies, especially in both Ukraine and Russia, are expected to sharply raise crush and boost supplies of meal and oil for export.

Growth in sunflower oil production in the coming year will more than offset expected lower rapeseed oil supplies. Sunflower oil production is forecast to reach an all-time high of 16.6 million tons, up 1.4 million on the year. Exports are projected to surge, with Ukraine and Russia accounting for the bulk of the increase. Global consumption is forecast to grow 4 percent, driven mainly by strong demand in the EU, India, the Middle East and North Africa. Production of sunflowerseed meal is forecast to reach a record 17.8 million tons, up 1.5 million on the year. Global consumption is expected to climb 8 percent, primarily substituting for reduced rapeseed meal supplies in the EU.

A projected global shortage of rapeseed and products in 2016/17 is likely to stimulate additional demand for sunflowerseed products, while leading to increased tightness in global sunflowerseed supplies. Ending stocks are forecast to decline over 11 percent in the coming year, reaching its lowest level since 1999.

OVERVIEW

2016/17

Global oilseed production is forecast higher this month. Larger soybean crop projections for the United States and Paraguay exceeded reductions for India and Ukraine. The rapeseed crop is raised with larger production estimates for Canada and Australia that more than offset reductions in the European Union and Russia. Global sunflowerseed production is also raised this month on larger forecasts for Russia and Ukraine. Soybean imports are forecast higher on projected larger shipments to the European Union and Argentina. Exports are raised on larger shipments from the United States and Paraguay more than offsetting reduced trade out of Ukraine. Global stocks are raised this month. The U.S. season-average farm price is projected at $9.10 per bushel.

2015/16

Global soybean production is raised this month on a larger harvest estimates for Paraguay, South Africa, and the European Union. Imports are higher on a stronger pace of trade in the European Union, Argentina, Japan, and Thailand. Exports are raised on larger shipments from the United States, Paraguay, and Ukraine that exceeded reductions in Argentina and Brazil. Global stocks are raised this month. The U.S. season-average farm price is estimated at $8.95 per bushel.

SOYBEAN PRICES

U.S. export bids in July, FOB Gulf, averaged $430/ton, down $12 from last month.

As of the week ending July 28, U.S. 2015/16 soybean export commitments (outstanding sales plus accumulated exports) to China totaled 28.6 million tons compared with 29.8 million a year ago. Total commitments to the world are 52.4 million tons, compared with 50.6 million for the same period last year.

2016/17 TRADE OUTLOOK CHANGES

  • United States
    • Soybean exports are up 816,000 tons to 53.1 million, on a larger production forecast.
    • Rapeseed imports are raised 100,000 tons to 440,000 on increased supplies forecast in Canada.
    • Rapeseed meal imports are reduced 290,000 tons to 3.7 million, reflecting slower crush growth in Canada
  • Argentina
    • Soybean imports are raised 250,000 tons to 300,000, in response to legislative changes that temporarily removed restrictions on imports for processing.
    • Soybean oil exports are lowered 370,000 tons to 5.6 million tons in response to larger production and exports of biodiesel.
  • Australia rapeseed exports are up 100,000 tons to 2.7 million on larger production projections.
  • Canada rapeseed exports are up 600,000 tons to 9.4 million, on a larger production forecast and strong global demand.
  • China
    • Peanut imports are boosted 200,000 tons to 600,000 reflecting rapidly growing demand for food and crush-quality peanuts.
    • Palm oil imports are reduced 500,000 tons to 5.2 million following growing demand for premium vegetable oils.
    • Sunflower oil imports are raised 100,000 tons to 750,000 reflecting growing demand for premium oils.
  • European Union
    • Soybean imports are up 400,000 tons to 13.0 million, while soybean meal imports are down 550,000 tons to 21.2 million, following developments in the current marketing year.
    • Soybean oil exports are raised 100,000 tons to 900,000 reflecting growing soybean crush and increasing exportable supplies of oil.
    • Rapeseed imports are boosted 500,000 tons to 3.0 million, reflecting a lower domestic production forecast and growing exportable supplies in Australia and Canada
  • India
    • Soybean meal exports are reduced 100,000 tons to 1.7 million on lower soybean production forecasts and reduced crush.
    • Peanut exports are raised 300,000 tons to 850,000 reflecting a larger production forecast.
  • Japan palm kernel imports are dropped 416,000 tons to 9,000, following historical revisions based on product reclassification.
  • Pakistan sunflower meal imports are raised 150,000 tons reflecting a stagnant domestic sunflowerseed production forecast and growing export availability in Russia and Ukraine.
  • Paraguay soybean exports are raised 200,000 tons to 5.0 million, based on an increased production forecast.
  • Russia sunflowerseed oil exports are boosted 200,000 tons to 1.9 million reflecting a larger sunflowerseed production forecasts and growing crush.
  • Senegal peanut exports surge 250,000 tons to 350,000, on higher production forecasts and strong demand in China.
  • Ukraine
    • Soybean exports are reduced 300,000 tons to 2.3 million, following a lower production forecast.
    • Rapeseed exports are reduced 100,000 tons to 900,000 following a lower production forecast.
    • Sunflowerseed meal exports and sunflowerseed oil exports are up 200,000 tons and 150,000 tons to 4.7 million and 5.0 million, respectively, on stronger crush forecasts.
  • Vietnam peanut imports are raised 100,000 tons to 330,000 reflecting growing demand for food purposes.

2015/16 TRADE CHANGES

  • United States
    • Soybean exports surge 2.3 million tons to 51.2 million, and soybean meal exports are increased 91,000 tons to 10.7 million, based on strong export sales and a slowing pace of shipments from South America.
  • Argentina
    • Soybean exports fall 900,000 tons to 10.5 million a slowing export pace.
    • Soybean imports spike 550,000 tons to 600,000 due to legislation changes that temporarily removed restrictions banning imports for processing.
    • Soybean meal and oil exports are reduced by 600,000 tons and 375,000 tons, respectively, to 32.2 million and 5.9 million, on reduced crush forecasts.
  • Brazil
    • Soybean exports are lowered 600,000 tons to 56.6 million on tightening supplies and slower pace of trade.
    • Soybean imports are up 100,000 tons to 450,000 on rising trade from Paraguay.
  • Canada
    • Rapeseed exports are raised 200,000 tons to 10.2 million on stronger demand in Pakistan and the European Union.
    • Rapeseed meal exports are lowered 100,000 tons to 4.0 million, based on pace of trade.
  • China
    • Peanut imports are boosted 200,000 tons to 580,000, on a stronger pace of trade.
    • Sunflowerseed oil imports are raised 100,000 tons to 750,000, while palm oil imports are reduced by 500,000 tons to 5.0 million, reflecting increasing demand for more premium vegetable oils.
  • European Union soybean imports are up 400,000 tons to 13.6 million, while soybean meal imports are down 300,000 tons to 20.4 million, on pace of trade.
  • India palm oil imports are lowered 250,000 tons to 9.3 million, on a slower trade pace.
  • Indonesia palm oil exports are down 700,000 tons to 24.3 million, on lower production forecasts.
  • Japan
    • Soybean imports are raised 150,000 tons to 3.3 million, while soybean meal imports are lowered 100,000 tons to 1.8 million, reflecting pace of trade.
    • Palm kernel imports are lowered 391,000 tons to 9,000, on historical revisions based on product reclassification.
  • Malaysia palm oil exports are reduced 500,000 tons to 17.0 million, and palm kernel oil exports are down 135,000 tons to 1.0 million, based on lower production forecasts.
  • Pakistan
    • Soybean meal imports are reduced 200,000 tons to 650,000.
    • Rapeseed imports are raised 250,000 tons to 1.1 million.
    • Sunflower meal imports of 150,000 tons are added, representing the first imports of any significance, reflecting a strong trade pace and stagnant domestic sunflowerseed production.
  • Paraguay soybean exports are increased 200,000 tons to 4.8 million following a higher production forecast.
  • Senegal peanut exports are boosted 270,000 tons to 340,000, on larger production estimate and strong demand in China.
  • Thailand soybean imports are up 250,000 tons to 2.6 million, while soybean meal imports are reduced 400,000 tons to 2.7 million, on pace of trade.
  • Ukraine
    • Soybean exports are increased 150,000 tons to 2.4 million on strong global demand.
    • Sunflowerseed oil exports are increased 100,000 tons to 4.3 million, on stronger demand mainly in China.
  • Vietnam peanut imports rise 100,000 tons to 325,000, on a stronger pace of trade.