PROJECTION FOR 2019/20

Global oilseed production is forecast at 580.9 million tons, down 5.1 million from the July forecast and 3.6 percent less than 2018/19. Soybean production is projected at 341.8 million tons, down 5.2 million tons from July and 5.8 percent from last year due to reductions in the United States, India, and the European Union. Sunflowerseed production is projected higher while reductions are forecast for rapeseed, peanut, and cottonseed. Copra and palm kernel production remain unchanged. Soybean imports are forecast at 148.9 million, down from July, but still higher than 2018/19. Brazil is projected to remain the leading soybean exporter in 2019/20 at 76.5 million tons. Global oilseed exports are down 300,000 tons from last month but still represent 1.2 percent growth over 2018/19. Global ending stocks are down from July and 11 percent less than 2018/19. Soybean ending stocks declined 2.8 million from July due to lower stocks in China, the United States, India, and the European Union partially offset by higher stocks in Argentina. Trade of soybean meal and soybean oil are both forecast up on growing global demand. The projection for the U.S. season-average farm price for soybeans is unchanged at $8.40.

OVERVIEW FOR 2018/19

Global 2018/19 oilseed production remains nearly unchanged at 602.3 million with minor reductions in sunflowerseed and cottonseed. Global soybean exports are down 1.9 million tons because of a 1- million-ton reduction in Argentina and a 400,000-ton decline in both Brazil and Canada. Rapeseed exports are slashed 1.5 million tons due to sharply curtailed exports from Canada. Soybean imports are down 1.3 million tons due to a 2-million-ton reduction in China partially offset by increases in Bangladesh and Canada. Rapeseed imports are also lowered by 700,000 tons due to declines in the United Arab Emirates and the European Union. Global soybean ending stocks are boosted 1.5 million tons this month as higher stocks for Argentina, the United States, Brazil, and Canada are partially offset by a 1-million-ton decline in China and a 100,000-ton reduction in the European Union. The U.S. season-average farm price for soybeans remains unchanged at $8.50 per bushel.

EXPORT PRICES

U.S. soybean export bids in July, FOB Gulf, averaged $351/ton, unchanged from June. Brazil Paranagua averaged $358/ton, down $9 from June. Argentina Up River FOB averaged $341/ton, down $6 from last month. U.S. soybean meal export bids (FOB Gulf) in July averaged $348/ton, down $11 from June. Brazil Paranagua FOB averaged $318/ton, down $16 from June while Argentina Up River FOB averaged $317/ton, down $14 from the previous month. The smaller crop and weather conditions in the United States caused prices to rise across the board in June However, prices leveled out in July as crop prospects improved on good growing conditions

EXPORT SALES

For the week ending August 1, 2019, U.S. 2018/19 soybean export commitments (outstanding sales plus accumulated exports) to China totaled 14.5 million tons compared to 27.9 million a year ago. Total commitments to the world were 48.8 million tons, compared to 58.5 million for the same period last year. Accumulated soybean exports to the world were at 42.0 million tons, down 11.3 million from last year. Accumulated soybean exports to China were at 10.6 million tons, 16.9 million tons lower compared to last year. Shipments to the rest of the world were at 31.3 million tons, 5.6 million above last year for the same period.

Global Soybean Export Growth Evaporates With Diminished China Demand

From the 10 years prior to 2018/19, global soybean exports nearly doubled in volume with annual growth averaging 7.5 million tons. Much of this growth was centered on China where import growth averaged 5.6 million tons annually, accounting for nearly 80 percent of soybean trade growth. With the arrival of African Swine Fever in China in mid-2018 along with the ongoing trade dispute, a steady decline in China’s soybean import volume has been observed with imports currently forecast to reach 83 million tons in 2018/19, 11 million tons below 2017/18. If not for the increase in demand from other markets, spurred in part by lower prices, the current trend in global soybean trade would have turned negative.

Consequently, this slowing demand, coupled with large crops and stock building has led to soybean prices running 10 percent below even a few years ago. Given the potential for slow demand growth in China, rising soybean production in Brazil, and extensive stocks primarily in the United States, the prospect for soybean prices again approaching $10/bu ($370/ton) is greatly diminished.