OIL CROPS OUTLOOK May 11, 2001
May 2001, OCS-0501
Approved by the World Agricultural Outlook Board
-----------------------------------------------------------------------------
OIL CROPS OUTLOOK is issued 11 times a year by the Economic Research Service,
U.S. Department of Agriculture, Washington, DC 20036-5831. Electronic
release only; no published copies are available.
OIL CROPS OUTLOOK is supplemented by an annual OIL CROPS YEARBOOK. The
yearbook summary for 2001 will be released on October 24, 2001. Yearbooks
are available in print from the USDA Order Desk. For the 2001 issue, call 1-
800-999-6779
(703-605-6220) and ask for stock #ERS-OCS-2001, $21.
----------------------------------------------------------------------------
Highlights
--U.S. Soybean Supplies Expected To Exceed Demand in 2001/02
--U.S. Soybean Meal Sales to Asia and Europe Support 2000/01
Domestic Crush
--Bumper South American Soybean Harvest To Carry Over into
2001/02
--Indian Oil Imports Expected To Surge
U.S. Soybean Supplies Expected To Exceed Demand in 2001/02
Assuming normal weather in 2001, the national average trend yield
for soybeans is estimated at 39.5 bushels per acre, a recovery
from last years below-trend yield of 38.1 bushels. Harvested
acreage is expected at 75.6 million acres, so the 2001 soybean
harvest would swell to a record 2,985 million bushels. Relatively
little corn and spring wheat has been planted in Iowa, Minnesota,
and the Dakotas this spring because of wet soil conditions. If
delays in grain planting persist through the end of May, soybean
plantings could exceed farmers March intentions of 76.7 million
acres. Poor stands of winter wheat also have some farmers in the
Central Plains considering replanting to spring crops. In
contrast, planting has proceeded quickly along the Ohio River, as
a lack of rainfall has dried out soils there. As of May 6, 20
percent of intended U.S. soybean acreage had been planted, down
from last years rapid pace but ahead of the 5-year average of 12
percent.
Despite an outlook for record soybean supplies, U.S. demand in
2001/02 is expected to increase minimally. Prospects for stronger
U.S. export growth depend on lower foreign oilseed output, a
weaker dollar, and a repeat of the robust growth in foreign
consumption seen in 2000/01. But U.S. soybean exports are
projected to slip to 980 million bushels from 990 million in
2000/01. Very large South American soybean supplies will hang
over this fall when the U.S. crop is harvested, and new crop
production may decline only minimally. In spite of low oilseed
prices that will urge some foreign producers to reduce plantings
in 2001, foreign oilseed production is expected to rise 2 percent
to 226.8 million metric tons based on a recovery of yields in
India and Eastern Europe. Abundant stocks of soybeans carried
forward by China will also curb U.S. export sales potential for
2001/02.
The U.S. Department of Agriculture (USDA) projects a modest
increase in 2001/02 domestic soybean crushing to 1,625 million
bushels. Moderate gains in domestic demand for soybean meal and
soybean oil and soybean oil exports are responsible for the
forecast increase. Given this scenario, U.S. ending stocks of
soybeans are projected to accumulate to 500 million bushels. The
farm price of soybeans is likely to drop even lower next season
to $3.90-$4.50 per bushel.
Low feed prices and improving profitability of livestock
production will promote domestic disappearance of soybean meal
next year, which is forecast up 2.4 percent to 32.1 million short
tons. But stiff foreign competition will make gains in U.S. meal
exports more difficult, which are anticipated down 150,000 tons
to 6.75 million. Abundant domestic and foreign supplies are
expected to pressure the 2001/02 average soybean meal price to
$145-$170 per ton, compared with $168 this season.
Demand growth and a moderate expansion of domestic crushing
should begin to tighten the soybean oil market somewhat in
2001/02, although very large oil stocks will be carried over from
the current season. Steady growth in soybean oil consumption is
expected to raise domestic disappearance 400 million pounds in
2001/02 to 16,750 million. In international trade, higher
relative prices for rapeseed and sunflowerseed oils are starting
to favor soybean oil. Global vegetable oil surpluses may also
ease next year because of slower expected growth in palm oil
output. Therefore, U.S. soybean oil exports are projected to rise
to 1,700 million pounds from 1,400 million in 2000/01. Season
ending oil stocks will likely remain relatively high at 2,080
million pounds, but less than the 2000/01 carryout. Average
soybean oil prices may have bottomed in 2000/01 at 14.0 cents per
pound. In 2001/02, oil prices may edge up to 13.5-16.5 cents per
pound.
U.S. Soybean Meal Sales to Asia and Europe Support 2000/01
Domestic Crush
U.S. soybean meal exports for 2000/01 were forecast up 150,000
short tons this month to 6.9 million. Brisk sales to the European
Union (EU), Indonesia, Egypt, and South Korea have particularly
helped buoy U.S. exports this year. Soybean meal exports to
Europe are higher because of a shortage of protein feeds
following the EU ban on meat and bone meal. EU agriculture
ministers have tentatively agreed to an extension of the ban
beyond its original June 30 expiration. Yet, there are few U.S.
sales outstanding to Europe, and a flood of South American
supplies will soon halt more shipments. Exports of Brazilian
soybeans and soybean meal (which were curbed this spring because
of the brisk competition for shipping space with Brazilian corn
exports) are now accelerating. U.S. sales should benefit from an
Indonesian ban on soybean meal imports from South America, India,
and China (attributed to fears of transmitting foot and mouth
disease). However, these other exporters may make up lost sales
by gaining market share elsewhere in Southeast Asia.
Soybean meal prices firmed somewhat in April from the stronger
meal demand, which helped domestic soybean crushing expand in
March to 141.8 million bushels from 128.9 million in February.
Consequently, the USDA raised its 2000/01 crush forecast 5
million bushels to 1,595 million. But, after accelerating in
February, export sales of soybean oil have again slowed. With no
changes in the forecasts of domestic demand and exports of
soybean oil this month, a larger output is seen boosting ending
stocks to 2,175 million pounds.
Strong demand growth will hold season ending soybean stocks to
295 million bushels, nearly unchanged from 290 million carried
over from 1999/2000. Yet, this expansion of the demand base is
possible only with the lowest soybean prices in three decades.
The 2000/01 U.S. average farm price was estimated at $4.40 per
bushel compared with $4.63 last season. Although the U.S. soybean
stocks-to-use ratio would not be historically high, world stocks
of oilseeds and vegetable oils will still remain quite abundant.
Bumper South American Soybean Harvest To Carry Over into 2001/02
An almost ideal growing season in South America swelled world
soybean output in 2000/01 nearly 8 percent from the year before
to 171.5 million metric tons. Brazilian farmers have harvested 97
percent of the soybeans but frequent rains in the South have
hampered completion. Based on expected record harvested area and
yield, USDA raised its forecast of Brazils soybean crop from
35.5 million to 36.5 million tons. As a result, the soybean
export forecast for Brazil was increased from 12.3 million to
12.7 million tons. While Brazilian soybean exports from May
through September are expected to be very brisk, stocks will
remain large (around 7.35 million tons) by next October.
Bordering the southern Brazilian state of Parana is Paraguays
soybean producing region, which experienced similarly excellent
growing conditions this year. Paraguayan rainfall was above
normal in January-February, and relatively dry weather during
March generally favored soybean harvesting. USDA forecasts
Paraguays 2001 soybean production at a record 3.4 million tons
from a harvested area of 1.25 million hectares. Consequently,
Paraguay is seen expanding its 2000/01 soybean exports to 2.5
million tons.
Western Europes soybean meal consumption is anticipated to
increase a robust 5 percent this year. Stronger soybean meal
prices in Rotterdam last fall and winter favored soybean imports
from the United States. Declining prices this spring are now
encouraging soybean meal imports from South America, although
some tightening of EU vegetable oil supplies will continue to
support crushing and imports of oilseeds. EU soybean meal imports
for 2000/01 were forecast 275,000 tons higher to 20.2 million.
Based on current purchases, it is now apparent that Chinas
2000/01 soybean imports will surpass last years record volume.
USDA forecasts soybean imports by China to reach 10.5 million
tons versus 10.1 million in 1999/2000. Yet, Chinas crushers are
facing declining margins, and soybean supplies are accumulating
faster than they can be used. Chinas soybean crush was left
unchanged this month at 17.9 million tons. The separation between
Chinas soybean crushers and its importers means that price
signals are blurred and the level of stocks can increase well
beyond what is immediately required. Season ending soybean stocks
in China are expected to increase to an unprecedented high of 3.8
million tons, although grain storage capacity has not been
lacking in China. Very slow purchases of soybean products by
China prompted lower import forecasts of just 175,000 tons of
soybean meal and 150,000 tons of soybean oil.
Indian Vegetable Oil Imports Expected To Surge
Drought in northern India cut rapeseed planting to 5.0 million
hectares this year and persistence of the dryness depressed
yields. The estimate of Indias 2000/01 rapeseed crop was reduced
another 0.5 million tons this month to 3.7 million. With fewer
supplies to crush, the May forecast of Indias 2000/01 vegetable
oil production was cut 100,000 tons.
Soybean oil imports are increasingly the most likely source for
covering Indias acute vegetable oil deficit. Border prices for
palm oil are currently discounted $75-$80 per ton to soybean oil,
but the Indian tariff differential has nearly equalized domestic
prices of palm oil and soybean oil. Indian consumption is very
price sensitive, so any small price wedge can cause a substantial
substitution between vegetable oils. Indias 2000/01 soybean oil
imports were forecast at 1.15 million tons, up from 1.0 million
last month. India typically imports soybean oil between May and
September, so Argentina and Brazil will usually supply most of
them. USDA also raised its 2000/01 forecast of Indian palm oil
imports 150,000 tons to a record 4.15 million, although these
will be achieved through very steeply discounted prices.
Recent market developments in India have been less favorable to
the major exporters of palm oil, Malaysia and Indonesia.
Malaysian palm oil production was higher than expected, raising
the 2000/01 from 11.9 million tons to 12.2 million. In the month
following the April 1 tariff hike by India, Malaysian palm oil
exports fell and reversed the stock decline begun in March. So,
after Malaysian palm oil prices had rallied to $234 per ton in
March, they fell back to $220 in April. Another reason for the
softening of Malaysian exports is the increasing competition from
Indonesia. The pressure on Indonesian palm oil producers to
export should remain acute, as 2000/01 domestic production is
forecast higher to 7.5 million tons from the revised 1999/2000
total of 7.2 million.
The next release of the Oil Crops Outlook is scheduled at 4:00
p.m. ET Wednesday, June 13, 2001. The report may be accessed at
the ERS website at http://www.ers.usda.gov or via
http://usda.mannlib.cornell.edu/.
Information Contacts:
Mark Ash--Soybeans, minor oilseeds, oils (202) 694-5289
mash@ers.usda.gov
Robert Skinner--Peanuts (202) 694-5313
skinner@ers.usda.gov
Table 1--Soybeans: U.S. supply and disappearance
-----------------------------------------------------------------------------
Supply Disappearance
------------------------------
------------------------------------
Year Seed,
begin. Beg. Im- Produc- Total Crush Ex- feed, Total End.
Sept. 1 stocks ports tion ports residual
stocks
-----------------------------------------------------------------------------
-------------------------- Million
bushels---------------------------
1999/00 1/ 348 4 2,654 3,006 1,579 973 164 2,716 290
2000/01 2/ 290 3 2,770 3,063 1,595 990 183 2,768 295
2001/02 2/ 295 3 2,985 3,283 1,625 980 178 2,783 500
-----------------------------------------------------------------------------
1/ Estimated. 2/ Forecast.
Table 2--Soybean meal: U.S. supply and disappearance
-----------------------------------------------------------------------------
Supply Disappearance
--------------------------------
------------------------------------
Year
begin. Beg. Im- Produc- Total Domestic Ex- Total End.
Oct. 1 stocks ports tion ports stocks
-----------------------------------------------------------------------------
---------------------------1,000 short
tons--------------------------
1999/00 1/ 330 49 37,623 38,003 30,378 7,331 37,710 293
2000/01 2/ 293 50 38,182 38,525 31,350 6,900 38,250 275
2001/02 2/ 275 65 38,785 39,125 32,100 6,750 38,850 275
-----------------------------------------------------------------------------
1/ Estimated. 2/ Forecast.
Table 3--Soybean oil: U.S. supply and disappearance
-----------------------------------------------------------------------------
Supply Disappearance
----------------------------- --------------------------------
Year
begin. Beg. Im- Produc- Total Domestic Ex- Total End.
Oct. 1 stocks ports tion ports stocks
-----------------------------------------------------------------------------
-------------------------- Million pounds---------------------------
1999/00 1/ 1,520 83 17,824 19,427 16,055 1,376 17,431 1,995
2000/01 2/ 1,995 75 17,855 19,925 16,350 1,400 17,750 2,175
2001/02 2/ 2,175 75 18,280 20,530 16,750 1,700 18,450 2,080
-----------------------------------------------------------------------------
1/ Estimated. 2/ Forecast.
Table 4--Cottonseed: U.S. supply and disappearance
-----------------------------------------------------------------------------
Supply Disappearance
-------------------------------- ------------------------------------
Year
begin. Beg. Im- Produc- Total Crush Ex- Other Total End.
Aug. 1 stocks ports tion ports
stocks
-----------------------------------------------------------------------------
-------------------------- 1,000 Short
tons--------------------------
1999/00 1/ 393 309 6,354 7,055 3,079 198 3,505 6,781
274
2000/01 2/ 274 298 6,436 7,007 2,800 200 3,697 6,697
310
2001/02 2/ 310 75 7,120 7,505 3,000 175 3,800 6,975
530
-----------------------------------------------------------------------------
1/ Estimated. 2/ Forecast.
Table 5--Cottonseed meal: U.S. supply and disappearance
-----------------------------------------------------------------------------
Supply Disappearance
--------------------------------
------------------------------------
Year
begin. Beg. Im- Produc- Total Domestic Ex- Total End.
Oct. 1 stocks ports tion ports stocks
-----------------------------------------------------------------------------
-------------------------1,000 Short tons---------------------------
1999/00 1/ 24 0 1,396 1,420 1,295 104 1,399 21
2000/01 2/ 21 0 1,280 1,301 1,160 120 1,280 21
2001/02 2/ 21 0 1,350 1,371 1,180 165 1,345 26
-----------------------------------------------------------------------------
1/ Estimated. 2/ Forecast.
Table 6--Cottonseed oil: U.S. supply and disappearance
-----------------------------------------------------------------------------
Supply Disappearance
----------------------------- --------------------------------
Year
begin. Beg. Im- Produc- Total Domestic Ex- Total End.
Oct. 1 stocks ports tion ports stocks
-----------------------------------------------------------------------------
-------------------------- Million pounds---------------------------
1999/00 1/ 76 8 943 1,027 837 141 978 49
2000/01 2/ 49 8 870 927 720 130 850 77
2001/02 2/ 77 5 960 1,042 825 140 965 77
-----------------------------------------------------------------------------
1/ Estimated. 2/ Forecast.
Table 7--Peanuts: U.S. supply and disappearance
-----------------------------------------------------------------------------
Supply Disappearance
------------------------- ----------------------------------------
Year
begin. Beg. Im- Produc- Total Dom. Crush Seed& Ex- Total End.
Oct. 1 stocks ports tion Food resid. ports
stocks
-----------------------------------------------------------------------------
----------------------- Million pounds---------------------------
1999/00 1/ 1,392 178 3,829 5,400 2,233 713 493 727 4,166
1,233
2000/01 2/ 1,233 179 3,253 4,665 2,160 560 360 585 3,665
1,000
2001/02 2/ 1,000 179 3,805 4,984 2,230 731 373 650 3,984
1,000
-----------------------------------------------------------------------------
1/ Estimated. 2/ Forecast.
Table 8--Oilseeds prices received by farmers, U.S.
--------------------------------------------------------
Marketing Soy- Cotton- Sun-
year beans seed flowers Peanuts Flaxseed
--------------------------------------------------------
$/bu. $/ton $/cwt Cents/lb $/bu.
1991/92 5.58 71.00 8.69 28.30 3.52
1992/93 5.56 97.50 9.74 30.00 4.12
1993/94 6.40 113.00 12.90 30.40 4.25
1994/95 5.48 101.00 10.70 28.90 4.63
1995/96 6.72 106.00 11.50 29.30 5.19
1996/97 7.35 126.00 11.70 28.10 6.37
1997/98 6.47 121.00 11.60 28.30 5.81
1998/99 4.93 129.00 10.60 28.40 5.05
1999/00 4.63 89.00 7.53 25.40 3.79
1999/2000
September 4.57 73.00 8.76 27.00 4.00
October 4.48 79.00 6.99 25.50 3.75
November 4.45 94.00 6.87 24.10 3.66
December 4.43 99.00 7.52 21.80 3.61
January 4.62 100.00 7.34 14.90 3.75
February 4.79 115.00 8.72 NA 3.43
March 4.91 NA 8.53 NA 3.70
April 5.00 NA 7.93 NA 3.66
May 5.19 NA 9.63 NA 3.77
June 4.93 NA 8.09 NA 3.64
July 4.53 NA 8.16 NA 3.25
August 4.45 78.00 7.82 NA 3.05
2000/01
September 4.57 93.00 6.34 27.70 3.10
October 4.45 104.00 5.84 26.50 3.17
November 4.55 108.00 6.09 23.10 3.42
December 4.78 110.00 6.44 25.30 3.47
January 4.68 109.00 6.94 29.60 3.47
February 4.46 114.00 7.38 NA 3.40
March 4.39 NA 7.47 NA 3.90
April 1/ 4.18 NA 7.15 NA 3.84
--------------------------------------------------------
1/ Preliminary. NA = Not available.
Table 9--Vegetable oil prices
---------------------------------------------------
Cotton- Sun-
Marketing Soybean seed flower Peanut Corn
year oil 2/ oil 3/ oil 4/ oil 5/ oil 6/
---------------------------------------------------
Cents/lb.
1991/92 19.10 22.83 21.63 27.30 25.82
1992/93 21.40 30.07 25.37 27.40 20.90
1993/94 27.00 30.30 31.08 43.20 26.38
1994/95 27.51 29.23 28.10 44.30 26.47
1995/96 24.70 26.53 25.40 40.30 25.24
1996/97 22.50 25.58 22.64 43.70 24.05
1997/98 25.80 28.85 27.00 49.00 28.94
1998/99 19.90 27.32 20.10 39.74 25.30
1999/00 15.60 21.52 16.68 35.39 17.81
1999/2000
October 16.08 20.15 17.78 40.40 21.97
November 15.63 19.69 17.91 41.00 21.96
December 15.30 21.25 17.60 35.40 21.68
January 15.63 21.98 17.91 33.00 20.81
February 15.09 22.65 16.85 32.50 20.06
March 16.21 23.70 17.31 31.60 19.28
April 17.52 24.57 18.07 33.00 18.32
May 16.75 22.97 16.93 36.25 16.63
June 15.65 21.54 15.59 36.00 14.57
July 14.70 21.03 14.68 35.63 13.55
August 14.34 20.17 14.64 35.00 13.03
September 14.24 18.52 14.93 34.90 11.85
2000/01
October 13.50 18.16 14.40 34.63 10.52
November 13.37 17.83 14.25 35.50 10.37
December 13.12 17.25 14.54 36.40 10.54
January 12.53 16.24 14.44 37.25 10.25
February 12.38 15.20 14.52 37.00 11.06
March 13.90 15.53 15.76 35.90 11.91
April 1/ 13.53 14.03 15.14 34.00 13.76
------------------------------------------------------
1/ Preliminary 2/ Decatur 3/ PBSY Greenwood MS
4/ Minneapolis 5/ Southeast mills 6/ Chicago
Table 10--Oilseed meal prices
---------------------------------------------------
Soy- Cotton Sun-
Marketing bean seed flower Peanut Linseed
year meal 2/ meal 3/ meal 4/ meal 5/ meal 4/
---------------------------------------------------
$/Short ton
1991/92 189.20 140.50 76.80 154.50 125.25
1992/93 193.75 161.78 89.00 172.90 133.60
1993/94 192.86 164.30 94.00 194.91 139.55
1994/95 162.55 112.02 62.70 128.94 95.85
1995/96 235.90 190.74 123.75 202.70 159.00
1996/97 262.00 192.00 110.60 232.00 158.75
1997/98 185.30 144.00 84.20 209.60 117.54
1998/99 138.50 109.55 65.20 104.94 84.49
1999/00 167.62 127.43 75.00 108.15 103.42
1999/2000
October 153.57 111.80 63.75 98.00 89.38
November 154.70 112.00 65.00 103.00 119.50
December 154.00 124.20 68.10 103.00 105.00
January 163.41 126.88 73.75 104.00 91.75
February 170.49 130.50 70.20 104.75 92.60
March 175.50 129.38 77.50 110.00 108.75
April 177.45 125.00 78.35 115.00 111.00
May 189.34 123.25 70.20 115.00 101.00
June 177.45 130.63 87.50 119.60 106.25
July 163.38 131.88 87.50 118.00 115.13
August 157.48 130.50 79.00 118.00 106.50
September 174.60 153.12 80.00 118.00 95.67
2000/01
October 171.52 150.00 83.00 118.00 110.00
November 179.95 141.88 85.00 118.00 113.75
December 195.65 160.83 88.75 118.00 121.25
January 183.17 184.00 106.00 142.50 140.00
February 166.08 148.75 110.00 120.00 130.00
March 156.32 138.13 98.75 118.00 121.88
April 1/ 158.48 140.00 86.25 110.75 116.25
-----------------------------------------------------------------------
1/ Preliminary 2/ Hi-pro Decatur 3/ 41% Memphis 4/ Minneapolis 5/ 50% SE
mills
ERS on the World Wide Web
ERS' newly redesigned and restructured website provides you with accurate,
timely, comprehensive, easy-to-find economic analysis on issues related to
agriculture, food, the environment, and rural development. Its been greatly
expanded--including 19 commodity briefing rooms, 12 country Briefing Rooms,
and a host of issue-oriented rooms covering issues ranging from analysis of
the World Trade Organization to topics such as risk management, farm
structure, and conservation and environmental policies.
Powerful new interface design
Packed with information, products, and services--yet clean, crisp, and easy
to
navigate.
User-friendly site structure
Navigate by topic, research-area emphasis, Briefing Rooms, publications, or
data. Or, browse our features and services.
Enhanced search feature
Users may search by key topic or by using an advanced search feature.
Synthesis of the extensive research
Briefing Rooms provide a synthesis of the issues and analysis, along with a
full collection of resources specific to a subject, including:
Latest publications
Latest data products
Recommended readings and data products
Recent research developments
Questions and answers
Newsletters
Related links
Maps and charts gallery
Economic models
A host of new services
? Users will be able to contact ERS experts, see upcoming
events/publications, find ERS research related to whats in the news, and
subscribe to E-mail updates.
And more!
Come visit us and see for yourself!
Bookmark www.ers.usda.gov
END_OF_FILE