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Outlook Summary: Oil Crops and Related Markets

Core Content

This report provides an outlook for U.S. and global oil crops, including soybeans, peanuts, sunflowerseed, and rapeseed, for the 2018/19 marketing year. It also includes historical data and market trends for soybean meal and oil, as well as cottonseed and meal. The focus is on production forecasts, yield trends, export and domestic demand, and the impact on market prices and ending stocks.

U.S. Soybean Outlook

• 2018/19 Forecast:

  • National Average Yield: 51.6 bushels per acre.
  • Harvested Area: 88.9 million acres.
  • Expected Crop: 4.586 billion bushels.
  • Crush and Exports: Both are forecast at 2.06 billion bushels.
  • Ending Stocks: Expected to reach a record 785 million bushels, an 83% increase from 2017/18.
  • Farm Price: Season-average forecast at $7.65-$10.15 per bushel, a decrease of 35 cents from the previous forecast.

• Key Factors:

  • Good weather and timely planting led to higher yields.
  • Farmers in 8 states, including Illinois, Indiana, Ohio, and Nebraska, may achieve record yields.
  • The extended period between pod development and maturity is expected to improve yields.

U.S. Peanut Outlook

• 2018/19 Forecast:
  • Production: 6.09 billion pounds, down sharply from the 2017 record of 7.2 billion pounds.
  • Yield: National average of 4,167 pounds per acre, second highest behind 2012/13.
  • Acreage: Sown area is lower than the previous year, contributing to the production decline.
  • Georgia: Largest production reduction among all peanut-producing states.
  • Condition: 71% of U.S. peanut acreage is rated good-to-excellent as of August 5, which is one of the highest percentages ever for this date.

International Outlook

Sunflowerseed

• Global Production Forecast:
  • 2018/19: 49.9 million tons, up 3 million tons from the previous forecast.
  • Key Contributors: Ukraine, Russia, EU, Turkey, Serbia, and Moldova.
  • Ukraine:
    • Production: Expected to rise by 1.5 million tons to 15 million.
    • Crush: Forecast to increase by 1.2 million tons to 14.5 million.
    • Exports: Likely to rise to 2.45 million tons.
  • Russia:
    • Production: Forecast up 500,000 tons to 11 million.
    • Crush: Up 400,000 tons to 10.4 million.
  • EU:
    • Production: Up 600,000 tons to 9.7 million.
    • Crush: Up 500,000 tons to 8.7 million.
    • Exports: Expected to increase to 1.65 million tons.
  • Turkey:
    • Production: Forecast to reach a record 1.7 million tons.

Rapeseed

• Global Production Forecast:
  • 2018/19: Trimmed to 72.1 million tons, down nearly 300,000 tons from the previous forecast.
  • EU:
    • Production: Reduced to 19.2 million tons, down 1 million tons from the previous forecast.
    • Crush: Down 650,000 tons to 23.3 million.
    • Imports: Expected to remain strong due to a domestic shortfall in rapeseed supply.
  • Ukraine:
    • Production: Up 400,000 tons to 2.6 million.
    • Crush: Up 400,000 tons to 2.45 million.
  • Russia:
    • Production: Improved to 1.8 million tons.
    • Crush: Up from 1.5 million tons.

Soybean Market Trends

• Domestic Crush:

  • 2017/18: Forecast at 2.04 billion bushels.
  • Exports: Forecast at 14.1 million short tons.
  • U.S. Soybean Meal Exports:
    • 2017/18: Up 600,000 short tons to 14.1 million.
    • Market Share: Gained in Indonesia, Philippines, Vietnam, Thailand, and Latin America.
    • Argentina: Exports of soybean meal fell 15% year-over-year.

• Soybean Meal Prices:

  • 2018/19 Forecast: Season-average price down to $295-$335 per short ton, down $20 from the previous year.

• Soybean Oil Prices:

  • 2018/19 Forecast: Season-average price down due to increased supply.
  • China: Reduced soybean imports due to higher import costs and lower profitability in soybean crushing.
  • Soybean Oil Substitution: Higher imports of sunflowerseed and rapeseed oil may compensate for reduced soybean oil use in China.

U.S. Soybean Supply and Disappearance (2018/19)

U.S. Soybean Meal Supply and Disappearance (2018/19)

U.S. Soybean Oil Supply and Disappearance (2018/19)

Cottonseed Outlook

• 2018/19 Forecast:
  • Production: 6,021 million short tons.
  • Imports: 0 million short tons.
  • Total Supply: 6,471 million short tons.
  • Crush: 1,900 million short tons.
  • Exports: 425 million short tons.
  • Other Use: 3,771 million short tons.
  • Ending Stocks: 375 million short tons.

Cottonseed Meal Outlook

• 2018/19 Forecast:
  • Production: 855 million short tons.
  • Imports: 0 million short tons.
  • Total Supply: 895 million short tons.
  • Domestic Use: 735 million short tons.
  • Exports: 120 million short tons.
  • Other Use: 3,771 million short tons.
  • Ending Stocks: 40 million short tons.

Summary of Key Trends

• Soybean Production: Expected to reach a record 4.586 billion bushels due to higher yields and a large harvested area.
• Soybean Crush and Exports: Both are forecast at 2.06 billion bushels, indicating strong demand.
• Soybean Meal and Oil: Both are expected to face downward pressure due to increased supply.
• China's Market: Reduced imports due to higher costs and lower profitability in soybean crushing.
• International Markets: Strong performance in sunflowerseed production and exports, especially in Ukraine, Russia, and the EU.
• Peanuts: Production is expected to decline due to lower sown area, despite higher yields in some states.
• Cottonseed: Production is forecast at 6,021 million short tons, with a focus on domestic use and exports.

Conclusion

The 2018/19 marketing year is expected to see a significant increase in U.S. soybean production and supply, leading to a record ending stock. However, this surplus may put downward pressure on prices. In contrast, international markets, particularly for sunflowerseed, are showing strong growth. China's soybean imports are expected to decline due to higher costs and reduced demand, while the EU faces a potential shortfall in rapeseed production, which may be offset by increased sunflowerseed oil supply. Peanut production is forecast to decline, and cottonseed and meal markets remain stable with expected production and consumption levels.