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Oil Crops Outlook Summary (OCS-17D, April 13, 2017)

Core Content

This report provides an overview of the outlook for oil crops in the United States and globally, focusing on production, planting intentions, market prices, and trade dynamics for the 2016/17 and 2017/18 crop years.

Main Points

U.S. Soybean Outlook

• Planting Intentions: U.S. farmers plan to sow a record 89.5 million acres of soybeans for the 2017/18 crop year, up 6.1 million acres from the previous year.
• Crop Shift: The increase in soybean acreage is due to a decline in wheat, corn, and sorghum planting.
• Seed Demand: Seed demand for soybeans is forecast at 104 million bushels, up 9 million bushels from the previous year.
• Ending Stocks: 2016/17 ending stocks are expected to rise to 445 million bushels, up 10 million bushels from the previous forecast.
• Market Prices: Soybean prices have fallen to near $9 per bushel, down from a January peak of $10.00–$10.50, due to higher supply and lower demand.
• Soybean Meal: The 2016/17 average price is forecast down to $310–$330 per ton, with a higher export forecast (up 300,000 short tons to 11.9 million) offset by reduced domestic use (down to 34 million tons).
• Soybean Oil: Domestic use is forecast at 20.2 billion pounds, down 350 million pounds from previous estimates. Season-ending stocks are expected to rise to 2.122 billion pounds, up from 1.772 billion.

International Soybean Outlook

• Global Production: Forecast at 346 million metric tons for 2016/17, up 5.2 million tons from the previous forecast.
• South American Production: Brazil's production is raised by 3 million tons to 111 million due to higher yields. Argentina's production is up 500,000 tons to 56 million due to increased harvested area. Paraguay's production is forecast to hit a record 10.1 million tons, up from 9.2 million.
• Exports: Brazil's 2016/17 soybean exports are forecast to rise by 900,000 tons to 61.9 million. Paraguay's exports are expected to increase by 800,000 tons to 6.2 million.
• Global Stocks: Global stocks are expected to climb to 87.4 million tons, well above the previous forecast of 82.8 million.

Other Oil Crops

• Peanuts: U.S. peanut acreage is expected to increase by 5% to 1.75 million acres in 2017/18. Producers in all states except Texas and New Mexico are planting more peanuts.
• Cottonseed: U.S. cottonseed production is forecast at 5,418,000 short tons for 2016/17. Supply is expected to be 5,859,000 short tons, with ending stocks at 484,000 short tons.
• Cottonseed Meal: U.S. production is forecast at 810,000 short tons, with ending stocks at 40,000 short tons.
• Cottonseed Oil: U.S. production is forecast at 545,000 short tons, with ending stocks at 50,000 short tons.
• Canola: U.S. farmers intend to plant a record 1.927 million acres in 2017, up 12% from the previous year, mainly in Oklahoma, Montana, and North Dakota.
• Sunflowerseed: Planting intentions for oil-type sunflowerseed are expected to decline by 259,000 acres to 1.159 million, the lowest since 1976. Non-oil-type sunflowerseed acreage is expected to rebound by 65% to 295,000 acres.
• Flaxseed: Acreage is down 16% to 313,000 acres, primarily in North Dakota.

Key Information

• Soybean Prices: Prices have dropped significantly, with March 2017 soybean stocks at 1.735 billion bushels, the highest since 2006/07.
• Export Trends: Brazil's soybean exports are expected to rise by 900,000 tons to 61.9 million, while global soybean exports are forecast to increase by 1.8 million tons to a record 140 million.
• China, EU, and Russia: These countries are expected to increase soybean imports due to lower prices, with China's imports forecast to rise by 1 million tons to 88 million.
• Palm Oil: Indonesian palm oil production is forecast to decrease by 1.1 million tons to 34 million, which could impact global supply and exports, especially for India.
• Indian Palm Oil Imports: These have declined by 11% compared to the previous year due to reduced demand and increased domestic vegetable oil production.

Tables Summary

• Table 1: Provides data on U.S. soybean supply and disappearance for the 2016/17 crop year.
• Table 2: Covers U.S. soybean meal supply and disappearance for the same period.
• Table 3: Summarizes U.S. soybean oil supply and disappearance.
• Table 4: Includes U.S. cottonseed supply and disappearance.
• Table 5: Details U.S. cottonseed meal supply and disappearance.
• Table 6: Summarizes U.S. cottonseed oil supply and disappearance.
• Table 7: Covers U.S. peanut supply and disappearance, including area planted, yield, and use statistics.

Conclusion

The report highlights the significant shift in U.S. crop acreage from wheat, corn, and sorghum to soybeans and canola, driven by market conditions and production trends. It also notes the impact of increased global soybean supply on prices and the potential for increased exports. Meanwhile, the outlook for other oil crops such as sunflowerseed and flaxseed shows declines, while peanut acreage is expected to increase. The report underscores the importance of global supply and demand dynamics, particularly in South America and Asia, and provides detailed data through various tables.