USDA forecasts flat global oilseeds supplies in 2016/17

Global oilseed supplies are forecast up just 1 percent in 2016/17, similar to the previous year, and soybean production is expected to grow 2 percent in response to increases in Brazil and China and a rebound in the India crop, the United States Department of Agriculture (USDA) said in its latest report.

These will more than offset reductions in the United States and Canada, it said, adding that production of copra, cottonseed, and sunflowerseed are forecast to rebound, offsetting lower output in global peanut and rapeseed crops.

Global oilseed demand is forecast to rise as well, at a slightly higher rate than the previous year. Soybean crush is forecast to grow 4 percent, slightly below levels observed over the past 2 years. Other oilseed crush is forecast to grow at a relatively slower pace in the coming year though rapeseed crush, owing to reduced seed production, is expected to decline.

Total soybean demand is forecast to grow in 2016/17, eclipsing global production, and leading to a decline in soybean ending stocks and global oilseed stocks in general. Ending stocks of peanuts, rapeseed and sunflowerseed, are also expected to decline, more than offsetting increases in cottonseed and palm kernels, the report said.

It forecast global protein meal consumption (soy meal equivalent, SME) to rise slightly in 2016/17, mainly driven by demand in China and other major markets.

Total protein meal consumption is expected to grow 3 percent, with increased disappearance for all meal types except rapeseed meal. Trade in protein meals is also forecast to rise, led by relatively strong growth in soybean meal exports. Growing soybean meal demand, which accounts for over 70 percent of global consumption, is the main driver in expanding trade, the report said.

Vegetable oil consumption as food is forecast to expand 3 percent in 2016/17, reflecting population and GDP growth. Food use consumption of all vegetable oils is expected to grow, led primarily by palm and soybean oil.

According to the report, overall global consumption of oils in industrial applications is also forecast to grow. Industrial use of palm oil is forecast to grow in line with increasing production and strengthening domestic bio-diesel mandates in Indonesia and Malaysia. Soybean oil production is expected to increase reflecting growing supplies from increased crush while supplies of rapeseed oil will decline in response to lower seed production. Global oil ending stocks are forecast to decline 5 percent in part due to a reduction in China’s rapeseed oil reserve.

Overview 2016/17

  • Global soybean production is projected to increase approximately 8.3 million tons (over 2.5 percent) from the current year.
  • Crop reductions in the United States and Canada are forecast to be more than offset by gains in South America, India, and China.
  • Soybean imports are forecast to rise, driven by continuing strong demand in China, Southeast Asia, and the EU. Brazil’s exports, yet again, are projected to exceed those of the United States; however U.S. market share in global soybean trade is expected to increase.
  • Strong global demand for protein feed will lead to growing crush which will pressure stocks lower. Soybean meal trade is forecast to expand, driven by strong demand in the EU and Southeast Asia.
  • Soybean oil trade is expected to slow, largely on India’s shrinking demand due to forecast rebound in domestic oilseeds production and crush and forecast increase in global palm oil supplies.
  • The U.S. season-average farm price is projected at $9.10 per bushel.

Forecast for 2015/16

  • Global soybean production is lower this month on reduced estimates for Brazil, Argentina, and Uruguay.
  • Exports are raised on greater shipments from the United States more than offsetting reductions in Uruguay.
  • Global stocks are reduced significantly this month reflecting reduced production in South America as well as increased U.S. exports.
  • The U.S. season-average farm price is raised to $8.85 per bushel.

 

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