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Oil Crops Outlook Summary

Core Content

This report provides an overview of the outlook for U.S. and global oil crops for the 2017/18 marketing year, including soybeans, soybean meal, soybean oil, peanuts, and related international developments.

Main Points

U.S. Soybean Outlook

• Yield Forecast: The 2017/18 U.S. soybean yield is forecast at 49.4 bushels per acre, which is second only to the 2016/17 record of 52.1 bushels per acre.
• Production Forecast: The total production is estimated at 4.381 billion bushels, surpassing the 2016/17 record of 4.307 billion bushels.
• Exports Forecast: New-crop soybean exports are expected to rise to 2.225 billion bushels, up from 2.15 billion.
• Crush Forecast: The soybean crush is forecast at 1.94 billion bushels, down by 10 million bushels from previous estimates.
• Ending Stocks: Ending stocks are projected to increase to 475 million bushels, up from 370 million in the previous year, marking the largest carryover since 2006/07.
• Prices: Farmers are expected to receive prices averaging $8.45–$10.15 per bushel, while soybean meal prices are forecast to average $295–$335 per short ton, down from $320 per ton in the prior year.

Global Soybean Outlook

• Global Production: Global soybean production for 2017/18 is forecast at 347.4 million metric tons, up by 2.3 million tons from the previous month.
• India Production: India's soybean production is reduced to 10 million metric tons from 11.5 million, due to a smaller sown area and lower crop quality.
• India Crush: The domestic soybean crush is forecast to decrease to 8.7 million tons, down from 8.9 million in the previous year.
• Soybean Meal Trade: Global soybean meal trade may be constrained due to increased foreign supplies and the use of rapeseed and sunflowerseed meal.

Peanut Outlook

• U.S. Peanut Production: The 2017/18 U.S. peanut crop is forecast at an all-time high of 7.4 billion pounds, driven by a record sown area and favorable conditions in key regions like Georgia.
• Ending Stocks: Season-ending peanut stocks are expected to reach nearly 2.6 billion pounds, up from 1.58 billion in 2016/17.
• International Impact: A reduced Indian peanut crop (forecast at 5.5 million tons) may create opportunities for U.S. peanut exports, particularly to China.

International Developments

• India Soybean Planting: India's soybean planting area is reduced to 10.5 million hectares, down from 12 million, due to low prices and excessive rainfall in Rajasthan.
• Canadian Canola: The Canadian canola crop faces challenges due to soil dryness, with production forecast at 20.5 million tons, a decrease of 500,000 tons from the previous forecast.
• Malaysian Palm Oil: Malaysian palm oil production for 2016/17 is down by 500,000 tons due to labor shortages and drought, with prices temporarily stabilizing.

Key Information

• Domestic Supply and Use:

  • U.S. soybean supplies are forecast to increase to 4.777 billion bushels, with total use expected to reach 4.158 billion bushels.
  • Soybean meal exports are forecast to decrease slightly to 12.2 million short tons, while soybean oil production is expected to increase, potentially affecting prices.

• International Supply and Use:

  • Global soybean production is forecast to rise, but India's production is reduced due to lower sown area.
  • Russian sunflowerseed production is expected to increase due to higher sown area and favorable weather, with potential for higher exports and crush.
  • The U.S. remains a key player in the global soybean market, with strong export expectations.

• Market Impacts:

  • A larger supply than use may lead to lower prices for U.S. soybeans.
  • The increase in U.S. soybean exports may be offset by a decline in soybean meal exports.
  • The surplus of peanuts in the U.S. may support higher demand and export opportunities.
  • Labor shortages in Malaysia are affecting palm oil production, which has implications for global vegetable oil markets.

Tables Summary

• Table 1 (Soybeans): Shows U.S. supply and use for the 2015/16 to 2017/18 marketing years, with data on area, yield, and ending stocks.
• Table 2 (Soybean Meal): Provides U.S. soybean meal supply and disappearance, including domestic and export data.
• Table 3 (Soybean Oil): Details U.S. soybean oil supply and use, with information on production and ending stocks.
• Table 4 (Cottonseed): Summarizes U.S. cottonseed supply and disappearance for the 2015/16 to 2017/18 years.
• Table 5 (Cottonseed Meal): Highlights U.S. cottonseed meal supply and disappearance, including production and exports.

Conclusion

The report highlights a surge in U.S. soybean and peanut production, which may lead to increased exports and higher ending stocks, potentially affecting prices and global trade dynamics. Meanwhile, India's reduced soybean and peanut production and Canadian canola challenges are expected to impact regional supply and demand. The U.S. remains a major player in the global oil crops market, with strong export expectations and adjustments in domestic use and crush.