OIL CROPS OUTLOOK February 09, 2001
February 2001, OCS-0201
Approved by the World Agricultural Outlook Board
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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 USDA Order Desk. For the 2001 issue, call 1-800-999-6779
(703-605-6220) and ask for stock #ERS-OCS-2001, $21.
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Outlook for a Large Foreign Supply Erodes U.S. Soybean Exports
and Prices
In spite of a record pace of U.S. soybean exports to date, a big
South American soybean crop is seen substantially curtailing
shipments in the coming months. With a slowing economy, U.S.
interest rates have declined and the dollar has weakened.
However, U.S. soybean exports to Western Europe are usually 80
percent complete by the end of February, so a weaker dollar this
spring should favor dollar-denominated new-crop South American
exports more than U.S. sales. And it is unlikely that the surge
of U.S. soybean exports to China in March 2000 (40 million
bushels) will be repeated this year without substantial Brazilian
harvest delays. The U.S. Department of Agriculture (USDA) cut the
2000/01 forecast of U.S. soybean exports from 975 million bushels
to 960 million.
Foreign demand for U.S. soybean products is also expected to slow
because of stiffer export competition, which should weaken prices
and domestic crushing. The 2000/01 crush is forecast down 10
million bushels this month to 1,590 million and is now only 11
million more than in 1999/2000. U.S. soybean meal exports are
forecast down 0.2 million short tons to 7.0 million. The outlook
for much larger world soybean supplies has caused soybean meal
prices to slump from their December peak of $196 per short ton to
a January average of $183. Consequently, the season-average price
forecast has been reduced to $170-$185 per ton.
Season ending soybean stocks are expected higher to 345 million
bushels by the scaling back of U.S. soybean demand by 25 million.
Since January, following confirmation of a larger U.S. crop than
the market had expected and greater certainty of a bumper South
American harvest, soybean prices dropped about 40 cents per
bushel. The season-average farm price forecast is lowered to
$4.50-$4.80 per bushel.
A major drag on soybean crushing has been the buildup of soybean
oil stocks. As of the end of December, soybean oil stocks had
surged to 2,310 million pounds. Greater strength in meal demand
than in oil demand has allowed processors’ oil stocks to
accumulate. Pipeline soybean oil stocks of end users have also
been maximized. Thus, domestic disappearance of soybean oil has
slowed as food consumption has reached an upper limit on growth.
Industrial consumption of soybean oil has increased minimally to
about 4 percent of total domestic use (587 million pounds in
2000). USDA reduced the 2000/01 forecast of domestic
disappearance to 16,400 million pounds, down 50 million from the
previous forecast.
U.S. soybean oil exports are under pressure from a global glut of
competing vegetable oil supplies. Domestic stocks of corn oil,
cottonseed oil, and sunflowerseed oil have also remained at very
high levels. And, record U.S. imports of canola oil and near-
record olive oil imports are expected. The January average
soybean oil price fell to 12.5 cents per pound. USDA reduced the
season-average price forecast to 12.75-14.25 cents per pound.
But as low as U.S. prices are, current South American soybean oil
prices are no higher or somewhat below them. Malaysian palm oil
prices are currently at a 3-cents-per-pound discount to U.S.
soybean oil. Although current U.S. export sales are near last
year’s pace, the expected expansion in foreign supplies is seen
slowing 2000/01 exports to 1,300 million pounds from 1,376
million in 1999/2000. Only 12 million pounds of soybean oil have
been sold to China (the second largest U.S. buyer last year)
compared with shipments of nearly 50 million pounds last year.
Sales to Mexico, the largest U.S. market in 1999/2000, are down
73 percent.
Optimal Weather Boosts South American Soybean Yields
World soybean supplies for 2000/01 are estimated up 3.2 million
metric tons this month to 194.2 million. But with only a modestly
improved outlook for world consumption, a contraction of the
global soybean stock surplus is not expected this year. Projected
world ending stocks for 2000/01 increased 2.8 million tons from
last month to 26.0 million.
Based on higher government estimates, Brazil’s 1999/2000 soybean
crop was raised 0.7 million tons to 33.2 million, while imports
were raised to 1.0 million tons. These changes mostly boosted the
estimate of Brazil’s 2000/01 beginning stocks to 6.2 million
tons. Brazil’s 2000/01 soybean production is forecast at 35.5
million tons, up from the previous forecast of 34.5 million.
A greater availability of Brazilian supplies raises the 2000/01
soybean export forecast from 11.0 to 12.0 million tons. A fast
pace for new-crop exports is suggested by current registrations,
which are 20 percent higher than a year ago. Brazil’s soybean
processors may benefit less, but crush is also expected 0.3
million tons higher to 22.0 million. Projected Brazilian soybean
meal exports edged up from 10.0 million tons to 10.1 million.
Larger carryover stocks and domestic consumption are expected to
account for the higher output of soybean oil.
A larger old-crop harvest estimate was also seen for Argentine
soybeans. Last year’s production was revised from 20.7 million
tons to 21.2 million, which accordingly lifted September ending
stocks to 5.6 million tons. For 2000/01, production gains are
largely due to a 14-percent expansion in planted area. Yet, based
on a nearly ideal growing season so far, USDA raised its February
forecast of new-crop Argentine soybean production from 23.5
million tons to 24.0 million. The harvest forecast would be 16
percent higher than last year’s record of 20.7 million tons. Most
of the additional supplies are expected to build stocks to be
carried into the 2001/02 season. Argentine soybean exports are
expected higher to 5.0 million tons from the January forecast of
4.7 million. However, forecast crush was unchanged at 18.25
million tons, leaving estimates of Argentine soybean meal and oil
exports also unchanged.
Soybean meal exports by India are expected to dip 0.1 million
tons from last month’s forecast to 2.5 million, despite formerly
brisk export sales. In late January, a severe earthquake in
western India damaged the port of Kandla, which ships about two-
thirds of India’s soybean meal exports. For now, stocks already
at the port cannot be transported and it may take several months
to fully restore operating capacity. While new deliveries of
soybean meal may be rerouted through other ports, such as Bombay,
the disruption at Kandla has forced some crushers to temporarily
shut down.
Soybean Imports Edge Out Demand for Soybean Products in China and
Mexico
As in recent years, so far in 2000/01 China has imported
relatively low volumes of soybean meal and soybean oil. China’s
October-December 2000 imports were down 67 percent for soybean
meal and 90 percent for soybean oil from a year earlier. China’s
rapeseed imports were also down by nearly half from a year ago,
leading to a cut in the 2000/01 forecast from 2.5 million tons to
2.3 million. Instead, China has primarily imported soybeans for
crushing. Recent railcar shortages that have limited soybean
shipments between suppliers in the northeast and southern
crushers have also contributed to relatively large soybean
imports.
In addition, China’s bid to join the World Trade Organization
(WTO) will eventually reduce import barriers for oilseed
products. But China’s accession to the WTO has been stalled
pending resolution of several outstanding issues, including how
much it will be allowed to directly subsidize agricultural
production. The delay in implementing lower oilseed product
tariffs has preserved crush margins for China’s soybean
processors. Soybean imports by China in 2000/01 are forecast at
8.6 million tons. The forecast would be higher than the previous
forecast of 7.8 million tons but still lower than 1999/2000
imports of 10.1 million tons. Conversely, import demand for
soybean meal and soybean oil is seen dropping to 500,000 and
450,000 tons, respectively.
While it is hard to ascertain an exact level of monthly soybean
use and stocks held in China, there is evidence to suggest that
there were ample stocks left over from last season’s spree of
imports. The domestic soybean harvest in 2000 increased over 1
million tons, and reports indicate rapeseed area planted expanded
5 percent again last fall. To justify a larger estimate of
2000/01 soybean imports, total consumption of protein meal and
vegetable oil would have to be stronger than the 6-percent growth
already anticipated. These circumstances should limit oilseed
imports compared with the surge experienced a year ago.
Mexico has also imported soybeans at a brisk pace this year. USDA
raised forecast Mexican imports 0.1 million tons to 4.25 million,
compared with 3.95 million in 1999/2000. Crushing of rapeseed
imports from Canada has swelled 75 percent from a year ago. But
Mexico’s imports of soybean oil, rapeseed oil, and sunflowerseed
oil have suffered because of greater domestic output.
The next release of the Oil Crops Outlook is scheduled at 4:00
p.m. ET Friday, March 9, 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
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Supply Disappearance
------------------------------ ------------------------------------
Year Seed,
begin. Beg. Im- Produc- Total Crush Ex- feed, Total End.
Sept. 1 stocks ports tion ports residual stocks
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-------------------------- Million bushels---------------------------
1998/99 200 3 2,741 2,944 1,590 805 201 2,595 348
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 1,590 960 168 2,718 345
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1/ Estimated. 2/ Forecast.
Table 2--Soybean meal: U.S. supply and disappearance
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Supply Disappearance
-------------------------------- ------------------------------------
Year
begin. Beg. Im- Produc- Total Domestic Ex- Total End.
Oct. 1 stocks ports tion ports stocks
------------------------------------------------------------------------------
---------------------------1,000 short tons--------------------------
1998/99 218 99 37,792 38,109 30,657 7,122 37,779 330
1999/00 1/ 330 49 37,623 38,003 30,378 7,331 37,710 293
2000/01 2/ 293 50 38,132 38,475 31,200 7,000 38,200 275
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1/ Estimated. 2/ Forecast.
Table 3--Soybean oil: U.S. supply and disappearance
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Supply Disappearance
----------------------------- --------------------------------
Year
begin. Beg. Im- Produc- Total Domestic Ex- Total End.
Oct. 1 stocks ports tion ports stocks
------------------------------------------------------------------------------
-------------------------- Million pounds---------------------------
1998/99 1,382 82 18,081 19,546 15,655 2,371 18,027 1,520
1999/00 1/ 1,520 83 17,824 19,427 16,055 1,376 17,431 1,995
2000/01 2/ 1,995 75 17,920 19,990 16,400 1,300 17,700 2,290
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1/ Estimated. 2/ Forecast.
Table 4--Cottonseed: U.S. supply and disappearance
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Supply Disappearance
-------------------------------- ------------------------------------
Year
begin. Beg. Im- Produc- Total Crush Ex- Other Total End.
Aug. 1 stocks ports tion ports stocks
------------------------------------------------------------------------------
-------------------------- 1,000 Short tons--------------------------
1998/99 563 207 5,365 6,135 2,719 68 2,955 5,742 393
1999/00 1/ 393 309 6,354 7,055 3,079 198 3,505 6,781 274
2000/01 2/ 274 298 6,439 7,010 2,850 180 3,700 6,730 280
------------------------------------------------------------------------------
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---------------------------
1998/99 88 0 1,232 1,320 1,174 121 1,295 24
1999/00 1/ 24 0 1,396 1,420 1,295 104 1,399 21
2000/01 2/ 21 0 1,285 1,306 1,165 120 1,285 21
------------------------------------------------------------------------------
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---------------------------
1998/99 79 48.2 832 958 772 111 882 76
1999/00 1/ 76 8.1 943 1,027 837 141 978 49
2000/01 2/ 49 8.3 910 967 770 145 915 52
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1/ Estimated. 2/ Forecast.
Table 7--Peanuts: U.S. supply and disappearance
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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---------------------------
1998/99 848 155 3,963 4,967 2,153 460 401 562 3,575 1,392
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 3,288 4,700 2,125 700 375 675 3,875 825
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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 1/ 4.59 109.00 7.03 20.60 3.55
--------------------------------------------------------
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 1/ 12.54 16.24 14.44 37.00 10.25
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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 1/ 183.17 184.00 106.00 142.50 140.00
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1/ Preliminary 2/ Hi-pro Decatur 3/ 41% Memphis 4/ Minneapolis
5/ 50% SE mills
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