Oilseeds. World Markets and Trade. December 2019 - USDA Dec. 11, 2019
PROJECTION FOR 2019/20
Global 2019/20 oilseed production is forecast at 574.6 million tons, up 3.3 million tons from November due to higher sunflowerseed, peanut, and soybean production offsetting lower rapeseed and cottonseed production. Sunflowerseed production rises 2.3 million tons on larger crops in Russia and Ukraine. Soybean production is up nearly 1.0 million tons reflecting higher area and yield reported by China’s National Bureau of Statistics. In response, oilseed crush is raised nearly 2.0 million tons to 496.5 million. Oilseed ending stocks also grew 1.6 million tons mainly on higher soybean stocks in Brazil offsetting declines in Bolivia and Vietnam. Protein meal production is up 0.8 million tons from last month to 338.6 million primarily on higher sunflowerseed meal production in Russia and Ukraine. Protein meal imports are up nearly 1.0 million tons as Vietnam shifts imports from soybeans to soybean meal. Exports are boosted on larger soybean meal shipments expected from Argentina and Brazil. Protein meal ending stocks are up 0.7 million tons on larger sunflowerseed meal stocks in Russia and Ukraine and soybean meal stocks in Brazil and the European Union. Vegetable oil production is up 0.6 million tons as higher sunflowerseed and peanut oil production partially offset small declines in rapeseed and palm oil. Oil stocks are up slightly from November at 19.2 million tons but still the lowest in 5 years. The projected U.S. season-average farm price for soybeans is down $0.15 to $8.85 per bushel.
CHANGES TO 2018/19
Global 2018/19 oilseed production is nearly unchanged at 596.6 million. Oilseed crush is down 1.0 million tons on mostly lower Brazil soybean crush. Protein meal production is down 0.8 million tons on lower soybean meal in Brazil and the European Union. Meal imports are up nearly 1.0 million tons due in part to strengthened soybean meal demand from Vietnam replacing its demand for soybeans as Argentina’s meal exports are competitively priced. Palm kernel meal imports are up on greater demand by the European Union. Vegetable oil production is nearly unchanged at 203.0 million tons.
Both soybean and soybean meal export prices were little changed in November. U.S. Gulf FOB soybean export bids in November averaged $357/ton, down $1 from October, though prices are sliding into early December. Brazil Paranagua FOB averaged $369/ton, down $3 from October. Argentina Up River FOB averaged $353/ton, down $1. U.S. soybean meal export bids in November averaged $339/ton, unchanged from October. Brazil Paranagua FOB averaged $319/ton, up $7 from October, and Argentina Up River FOB averaged $320/ton, up $11. Brazil FOB soybean prices are averaging 3 percent above U.S prices, slightly less than last month’s 4 percent.
For the report ending November 28, 2019, U.S. soybean accumulated exports (shipments) to China totaled 6.6 million tons and 9.4 million to the rest of the world. Outstanding sales were 3.0 million tons to China and 6.9 million to the rest of the world. Last year at this time, accumulated exports to China were 271,000 tons and 12.7 million tons to the rest of the world, and outstanding sales to China were 244,000 tons and 10.7 million tons to the rest of the world. U.S. soybean export commitments (outstanding sales plus accumulated exports) to China totaled 9.6 million tons compared to 515,000 tons a year ago. Total commitments to the world were 25.9 million tons, compared to 24.0 million for the same period last year.
Brazil Sees Record Soybean Exports In October – November 2019
Brazil exported a record 10.3 million tons of soybeans in the 2 months ending November 2019, exceeding last year’s 10.0 million tons for the same period. Both 2018 and 2019 were significantly above the average 2.6 million tons shipped between 2013 and 2017. While the high volume shipped in 2018 came during a period when U.S. producers were shut out of China and Argentina supplies were tight, shipments this year occurred despite ongoing U.S. sales to China and higher volumes being shipped from Argentina.
The record volume shipped from October to November reflects a number of forces at work including abundant supplies, competitive pricing, and producers’ willingness to sell as local prices reached their highest levels since October 2018. Current soybean port prices are near 1,540 reals per ton, up 18 percent from levels observed at harvest. About half of this increase is due to a rise in Brazil’s dollardenominated export price. The remaining half is in response to a weakening currency that has declined 13 percent since the February harvest. With prices higher and a weak real providing pricing power in export markets, sales and shipments are on the rise.
An additional factor is the higher volume available for shipment in October-November 2019. Despite entering the year with 5 million tons lower supply, total exports and crush have fallen 10 million tons behind last year’s pace. This resulted in October 1 supplies roughly 5 million tons above last year, adding support to the strong late-season shipments.