20180716-USDA-Soybean_Prices_Plunge_to_a_9-Year_Low_18页_220kb

Oil Crops Outlook Summary

Core Content

This report outlines the outlook for oil crops, primarily focusing on soybeans and soybean products in the United States and globally, with an emphasis on the impact of trade policies and weather conditions.

Main Points

U.S. Soybean Outlook

• Production Forecast: The U.S. soybean production for 2018/19 is forecasted at 4.31 billion bushels, an increase of 30 million bushels from the previous month.
• Harvested Acreage: Estimated at 88.9 million acres, slightly below the record planted acreage of 89.6 million acres.
• Yield: Projected at 48.5 bushels per acre, consistent with the previous estimate.
• Export Forecast: Reduced by 250 million bushels to 2.04 billion due to the 25% ad valorem tariff imposed by China.
• Domestic Demand and Crush: Domestic soybean crush is forecasted at 2.045 billion bushels for 2018/19, with strong margins expected due to increased demand.
• Soybean Meal Exports: Forecasted to rise to 13.5 million short tons in 2017/18, with a slight decline expected in 2018/19.
• Soybean Oil Use: Projected to increase for biodiesel in both 2017/18 and 2018/19, driven by supportive policies and strong demand.
• Season-Average Farm Price: Forecasted to decrease to $8.00-$10.50 per bushel in 2018/19, reflecting the revised supply and demand outlook.

Impact of Trade Policies

• China's Tariff: The 25% ad valorem tariff on U.S. soybeans has led to a significant reduction in U.S. export forecasts and an increase in season-ending stocks.
• Alternative Markets: With the tariff, U.S. soybean exports may shift to Brazil and other South American countries, which are expected to increase their soybean production.
• U.S. Market Share: Despite the tariff, some trade with China is still expected due to the lack of alternative suppliers.

South American Soybean Outlook

• Brazil: Expected to increase soybean production to a record 120.5 million tons, with a projected area of 37.5 million hectares.
• Argentina: Projected to increase harvested area by 13% to 19 million hectares, with production expected to rise significantly due to recovery from drought.
• Price Increases: Higher prices in South America have encouraged increased planting and production, which could offset some of the U.S. export losses.

Global Outlook

• Sunflowerseed Output: Global sunflowerseed production for 2018/19 is expected to decline by 2.9 million tons due to drought and heat in Ukraine and Russia.
• Sunflowerseed Oil: Exports are projected to decrease, with a potential impact on global supply and demand.
• Rapeseed Output: Global rapeseed production is forecasted to decline by 2.6 million tons, affecting the EU and Australia.

Key Information

• U.S. Soybean Supply and Disappearance:

  • 2018/19: Total supply is expected to reach 4.8 billion bushels, with exports forecasted at 2.04 billion bushels and ending stocks at 580 million bushels.
  • 2017/18: Total supply was 4.715 billion bushels, with exports at 2.085 billion bushels and ending stocks at 465 million bushels.

• Soybean Meal Supply and Disappearance:

  • 2018/19: Exports are forecasted at 13.1 million tons, with a slight decline in demand compared to previous years.

• Soybean Oil Supply and Disappearance:

  • 2018/19: Domestic consumption is projected to increase to 21.8 billion pounds, with exports expected to rise to 2.2 billion pounds.

• Weather Impact:

  • Favorable weather conditions have led to strong crop conditions in the U.S., while drought and extreme heat have negatively impacted sunflowerseed and rapeseed production in Ukraine, Russia, and parts of Europe.

• Market Trends:

  • Domestic Crush: Expected to continue its upward trend, driven by increased demand and strong margins.
  • Export Dynamics: U.S. exports to China may decline, with increased export activity to other markets like Brazil.

Conclusion

The U.S. soybean market faces challenges due to the trade conflict with China, leading to lower export forecasts and increased domestic supply. However, strong domestic demand and favorable crop conditions support the market. South American producers are expected to benefit from the trade shift, with Brazil and Argentina increasing their soybean production. Meanwhile, global markets for sunflowerseed and rapeseed are under pressure due to adverse weather conditions, which may affect supply and demand dynamics. The report highlights the importance of trade policies and weather conditions in shaping the outlook for oil crops.