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Oil Crops Outlook Summary

Core Content

This report provides an outlook on the U.S. and international oil crops, focusing on soybeans, soybean meal, soybean oil, cottonseed, cottonseed meal, and peanuts. It includes updates on production, exports, domestic use, and prices, with an emphasis on the 2017/18 and 2018/19 marketing years.

Main Points

U.S. Domestic Outlook

• Soybean Crush:

  • USDA raised the 2017/18 U.S. soybean crush forecast by 25 million bushels to a record 2.015 billion.
  • This increase lowers the season-ending stocks forecast to 505 million bushels from 530 million.
  • The average farm price for soybeans is expected to rise by 5 cents to $9.40 per bushel due to strong demand.
  • U.S. soybean exports for 2017/18 are forecast at 2.065 billion bushels, unchanged from the previous forecast.

• Soybean Meal:

  • U.S. soybean meal exports for 2017/18 may challenge the 2014/15 record of 13.1 million short tons.
  • Domestic use is expected to reach 35.2 million tons, up from 35 million.
  • For 2018/19, domestic consumption is projected to increase by 200,000 tons to 35.4 million.

• Soybean Oil:

  • U.S. soybean oil exports for 2017/18 are forecast at 2.4 billion pounds.
  • Domestic disappearance of soybean oil is forecast at 20.6 billion pounds, down from 21.3 billion due to reduced use.
  • The U.S. export forecast for 2018/19 remains unchanged at 23,400 million pounds.

• Peanuts:

  • U.S. peanut planting for 2018/19 is ahead of schedule, with 91% sown by June 10 compared to the 5-year average of 94%.
  • Texas peanut planting is not delayed, but soil dryness is a concern.
  • Peanut exports for 2017/18 are forecast at 1.327 billion pounds, with a total disappearance of 6.093 billion pounds.

International Outlook

• Brazil:

  • 2017/18 soybean production is forecast at a record 119 million metric tons, up 2 million from the previous estimate.
  • Soybean exports are expected to increase by 1.35 million tons to 74.65 million.
  • A nationwide truck strike in May disrupted domestic use and export logistics, but exports still reached a record due to pre-strike stock accumulation.
  • For 2018/19, Brazil's soybean production is projected to rise by 1 million tons to 118 million, with exports forecast at 72.95 million tons, 650,000 tons above the previous forecast.

• Argentina:

  • 2017/18 soybean harvest is forecast down by 2 million tons to 37 million.
  • Soybean exports are expected to drop by 700,000 tons to a 19-year low of 3.5 million tons.
  • Argentina's soybean meal exports are forecast to decrease to 28.5 million tons from 29 million.
  • The country is projected to be overtaken by Paraguay and Canada in soybean exports for 2018/19.
  • Argentine biodiesel exports are expected to decline due to an export tax increase from 8% to 15% in July 2017, which is expected to align with soybean oil tax rates.

• EU Rapeseed:

  • The 2018/19 EU rapeseed production is forecast down by 350,000 tons to 75.1 million.
  • Reduced yields due to dry and warm weather in April-May, especially in Germany and Poland, are expected to lower production.
  • Higher imports are projected for 2018/19 at 4.5 million tons, up from 4.35 million.
  • EU rapeseed crush is forecast to remain steady at 25.5 million tons.

Key Information

• Soybean Crush: Strong demand for soybean meal has driven the U.S. crush to a record high.
• Exports: U.S. soybean exports for 2017/18 are running at a strong pace, supported by new sales to Europe, Taiwan, Mexico, and Egypt.
• Price Trends: Prices received by U.S. farmers have been impacted by Argentine crop losses, with a spike above $9.80 per bushel.
• Logistical Issues: Brazil faced supply chain disruptions due to a truck strike, but exports still reached a record due to pre-strike stock accumulation.
• International Competition: Argentina's soybean oil is less competitive due to a wide price discount compared to U.S. soybean oil.
• Weather Impact: Dry and warm conditions in the U.S. and Argentina have affected crop yields and harvest progress.
• Market Adjustments: Argentina plans to increase biodiesel export taxes, which may affect its competitiveness in global markets.

Summary Tables

• Table 1: Summary of U.S. soybean supply and disappearance for 2016/17, 2017/18, and 2018/19, including area planted, harvested, yield, production, imports, and ending stocks.
• Table 2: U.S. soybean meal supply and disappearance, including beginning stocks, production, imports, and disappearance for the marketing years and months.
• Table 3: U.S. soybean oil supply and disappearance, including production, imports, and use by domestic and export sectors.
• Table 4: U.S. cottonseed supply and disappearance, with data on production, crush, and exports.
• Table 5: U.S. cottonseed meal supply and disappearance, showing domestic and export use.
• Table 6: U.S. cottonseed oil supply and disappearance, highlighting production and use by domestic and export sectors.
• Table 7: U.S. peanut supply and disappearance, including area planted, harvested, yield, and use statistics.
• Table 8: Prices received by U.S. farmers for various oil crops, including soybeans, cottonseed, sunflowerseed, canola, and peanuts, for different marketing years.

Conclusion

The report highlights the robust demand for U.S. soybean products, particularly soybean meal, which has driven record crush levels and increased farm prices. Brazil's strong production and export performance, despite logistical challenges, is expected to continue, while Argentina faces production constraints and export declines due to adverse weather and policy changes. The EU's rapeseed outlook is affected by reduced yields, leading to increased imports and stable crush levels. Weather and logistics play significant roles in shaping the outlook for oil crops globally.