Situation and Outlook
The U.S. oilseed crush forecast for 1997/98 is increased this
month as both estimated domestic and export demand for oilseed
products are increased. However, reduced oilseed export prospects
leave carryover stocks only a little lower compared to last
month. Most of the changes in the forecast are in soybeans, with
crush raised 545,000 tons (20 million bushels) while exports are
cut 408,000 tons (15 million bushels), to 26.1 million tons (960
Increased crush is based on larger domestic use and export prospects for both soybean meal and soybean oil. Domestic use for both soybean oil and soybean meal was about 5 percent ahead of year-earlier levels in October-December. Soybean meal use is expected to slow as pipeline inventory demands subside and poultry production growth slows. Soybean meal exports were off to a very strong start through January, but are expected to show a seasonally strong drop after March when record South America crops enter the market. Soybean oil exports will remain seasonally strong as global vegetable oil inventories are forecast to tighten. Malaysian palm oil production is cut to 8.8 million tons this month, off 200,000 tons from last month and last year, and sunflowerseed oil production and exports are reduced for Argentina.
U.S. soybean prices are unchanged this month while soybean meal prices are slightly down at $195 to $210 per short ton. Soybean oil prices are increased slightly to 24.75 to 27.25 cents per pound.
Global oilseed production for 1997/98 is forecast at a record 283.6 million tons, up 2.6 million tons from last month and 22.8 million tons from last year. Foreign production, forecast at 199.0 million tons, accounts for the gain from last month. Soybean output is forecast at 152.3 million tons, up 1.7 million tons from last month. Argentina's soybean crop is forecast to reach a record 16.0 million tons, up 1.5 million tons, as growing conditions remain ideal. Other changes mainly reflect historical upward revisions for African peanut crops and a reduced sunflowerseed crop in Argentina.
Foreign soybean and soybean meal demand changes this month are largely offsetting. Soybean meal imports and use are raised slightly for Japan and China, offsetting a reduction in Indonesia. For soybean meal exports, India's prospects are cut 200,000 tons based on early-season quality problems and slowed crush. This more than offsets an increase in Argentina's soybean crush and soybean meal exports. For soybeans, a combined 400,000-ton increase in Argentina's and Paraguay's exports and a reduction in Malaysia's and Indonesia's soybean imports are expected to sharply slow U.S. soybean exports in the last half of 1997/98.
The 1997/98 world soybean production forecast was increased 1.7 million tons this month to 152.3 million tons reflecting increases in Argentina and Paraguay. Expanded area in Argentina and good to excellent growing conditions in both countries have raised yield potential 7 percent and 4 percent, respectively. Forecast world soybean exports were reduced this month mirroring a 2-percent drop in the U.S. export forecast that more than offset larger export forecasts for Argentina and Paraguay. Decreased import estimates for Malaysia and Indonesia in response to their financial crisis accounted for most of the decline in the world soybean import forecast this month. The world ending stock forecast for September 1998 was raised this month based on larger supplies in Argentina. U.S. soybean ending stocks were reduced reflecting higher crush in response to strong domestic and international meal and oil demand.
Global soybean meal exports in 1997/98 are forecast at 35.9 million tons reflecting a 2 percent increase in the U.S. and Argentina's forecast in response to continued strong world demand. China's import demand continues to lead and support strong soybean meal imports and consumption in Asia. China's soybean meal imports were raised 100,000 tons this month to 4.6 million tons.
The world soybean oil export forecast for 1997/98 was raised 109,000 tons to 6.3 million tons in response to increases this month in the U.S. and Argentina. The U.S. soybean oil export forecast were increased 22 percent above the year earlier level at 1.1 million tons. Global 1997/98 soybean oil imports were raised 128,000 to 6.3 million tons based on expected growth in soybean oil demand in China.
The U.S. soybean export forecast was reduced this month reflecting strong competition from South America. However, the soybean meal and oil export forecasts were raised this month based on continued strong world demand for the products and higher U.S. availabilities.
Malaysia's soybean imports for 1997/98 are
reduced by 100,000 tons this month due mainly to slowing demand
as the economic crisis continues and the currency devaluation
keeps prices high.
Indonesia's soybean imports for 1997/98 are reduced 70,000 tons this month as the fast import pace experienced in the beginning of the year has slowed considerably due to currency devaluation. As of February 5th, Indonesia had imported 66 percent of the estimated total imports of 800,000 tons. Imports of soybean meal for 1997/98 are reduced by 190,000 tons this month as poultry producers continue to struggle with the currency devaluation.
Despite the record harvest of soybeans this year, India's exports of soybean meal are reduced this month by 200,000 tons to 3.0 million tons because of early season quality problems due to high moisture content soybeans.
World oilseed production for 1997/98, excluding soybeans, was increased 967,000 tons in February to 131.3 million tons. The adjustment of oilseed production estimates for many smaller countries accounted for most of the increase. Of particular note was an increase in peanut production estimates, primarily in Africa. Total world peanut production in 1997/98 is estimated at 27.0 million tons, an increase of 752,000 tons over the January estimate. However, total production remains nearly 2 million tons below last year's level as the increases failed to offset the decline in China's 1997 peanut production.
For other oilseeds, both copra and rapeseed production estimates were increased this month. Rapeseed production rose in response to increases among a number of smaller producers, while a 220,000 ton increase in Indonesia's copra production forecast to 1.7 million tons accounted for all of the world copra change this month. Forecast trade in other oilseeds was increased this month with exports up 280,000 tons to 11.8 million tons. With sunflowerseed, a rebalancing of EU trade based on final 1996/97 trade figures resulted in an increase in France's exports to other EU countries. Argentina's sunflowerseed export forecast was reduced 100,000 tons this month in response to their lower production estimate.
Forecast 1997/98 other oilseed crush was increased 262,000 tons this month as higher copra, cottonseed, peanut, and rapeseed crush more than offset reduced sunflowerseed and palm kernel crush. Compared to last year, total crush of other oilseeds is expected to rise 1.5 million tons to 104.0 million tons. The total other oilseed ending stocks forecast for February was reduced 130,000 tons to 3.3 million tons. This is 6 percent below a year ago and reflects a 27 percent reduction in sunflowerseed stocks in 1997/98 compared to a year earlier.
World protein meal production, excluding soybean meal, was increased 229,000 tons in February to 57.6 million tons. Increased cottonseed, rapeseed, peanut, and copra crush equally contributed to the increase this month. Increases in rapeseed and copra meal exports helped boost the export forecast for other oilseed and protein meals to 16.2 million tons in 1997/98, nearly unchanged from last year. Forecast consumption of protein meals, excluding soybean meal was increased this month due to the larger expected production of protein meals. Protein meal ending stocks are projected lower in 1997/98 due to a reduction in Japan's fishmeal stocks and small reductions in world sunflowerseed, copra, and palm kernel meal stocks.
World vegetable and marine oil production, excluding soybean oil, was reduced 88,000 tons this month to 54.7 million tons as lower forecast production of palm, palm kernel, and sunflowerseed oils was partially offset by an increase in forecast coconut oil production. Forecast vegetable and marine oil exports, excluding soybean oil, was increased 226,000 tons this month to 21.9 million tons in response to increased coconut and rapeseed oil export forecasts. Forecast oil consumption, excluding soybean oil, was increased slightly this month to 54.2 million tons. Increased palm, peanut, and olive oil consumption forecasts more than offset lower rapeseed, palm kernel, and sunflowerseed oil consumption forecasts. Total consumption of other oils is still expected to show a 2.5 percent increase over 1996/97 consumption. Forecast ending stocks, excluding soybean oil, were reduced 122,000 tons in response to a lower palm oil stock forecast this month.
Other Oilseed Highlights
Palm oil production for Malaysia is reduced
this month by 200,000 tons as the rain situation during the last
two years as well as the haze during the dry season continue to
Preliminary data for Indonesia's copra production indicate that yields have improved; therefore, the production estimated for 1997/98 is increased this month by 220,000 tons. Although production of palm oil is unchanged this month, the recent announcement of the Indonesian government to maintain the export ban on palm oil well past March 1998 has pushed the word price of palm oil to new highs. The export ban was imposed because of the very low Indonesian stocks as well as the desire of the government to ensure supplies for domestic use at affordable prices.
Peanut production in sub-Saharan Africa was increased 546,000 tons this month in response to an adjustment in historical production estimates. Production estimates were also increased in the Middle East/North Africa region, up 119,000 tons, and Asia, up 99,000 tons. For the most part, these changes had little impact of world peanut trade as much of the additional production is consumed locally as whole peanuts, or as meal and oil.
Australia's 1997/98 rapeseed exports were increased 140,000 metric tons to 505,000 metric tons. Export growth has been driven by import demand from China. China's rapeseed imports were increased 250,000 metric tons to satisfy increased crush demand for the relatively high oil-bearing seed.
Argentina's and South Africa's sunflowerseed production forecasts were reduced this month. Production in Argentina was reduced 250,000 ton to 5.8 million tons due to detrimental weather conditions while South Africa's production was reduced 150,000 to 450,000 on the account of a reduction in planted area. Farmers in South Africa reduced plantings in expectation of a dry December due to the El Nino weather phenomenon.
Production in Russia was increased 200,000
tons to 2.8 million tons based on an updated post harvest report
from the Russian state statistical committee.
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