OIL CROPS YEARBOOK--SUMMARY October 24, 1996 Approved by the World Agricultural Outlook Board ------------------------------------------------------------------------------ This SUMMARY is published by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20005-4788. The complete text of the OIL CROPS YEARBOOK (OCS-1966) will be available 2-3 working days following release of this summary. ------------------------------------------------------------------------------ Soybean Ending Stocks-to-Use Ratio During 1995/96 Lowest in 20 Years U.S. farmers planted 62.6 million acres of soybeans in 1995. Flooding and wet soil conditions prevented farmers from planting corn on schedule, especially in the areas neighboring the Missouri, Illinois, and Ohio Rivers. Although prices in the spring favored fewer soybeans flexed onto corn base acreage, farmers switched to soybeans as their next best alternative because of the delays. The 1995 U.S. soybean crop yielded 35.3 bushels per acre, down from a record 41.4 bushels in 1994. Given a late start, extreme summer heat, and an early killing frost, 1995/96 soybean production was 2,177 million bushels. With lower carryin stocks and production, total supplies in 1995/96 were 215 million bushels less than 1994/95's record of 2,731 million. Last spring, soybean meal prices reacted strongly to U.S. Department of Agriculture (USDA) reports indicating tight grain stocks, less-than-expected acreage intentions for corn, and only modest declines in swine herds and slaughter. U.S. soybean meal prices surged, rising to an average $236 per short ton, over $70 per ton above 1994/95. Despite higher feed costs, robust pork and poultry demand raised domestic soybean meal disappearance to 26.8 million short tons, 1 percent above 1994/95. U.S. exports of soybean meal dropped 13 percent from 1994/95 to 5.9 million short tons. Strong world soybean meal prices and the European Union (EU) tax on wheat exports encouraged consumption of grains over soybean meal, and high meal prices favored EU imports of soybeans over soybean meal. Domestic crush dropped by 35 million bushels in 1995/96 to 1,370 million despite strong gains in soybean meal prices. Reduced soybean supplies and rising soybean oil inventories were instrumental in a lower crush. U.S. oil outturn was 15,263 million pounds, down 350 million from the 1994/95 record. U.S. total soybean oil exports were 1,040 million pounds (down 61 percent from the previous year), with exports to China down to 299 million pounds. Negligible sales to Morocco, Algeria, and Tunisia also dimmed U.S. soybean oil exports in 1995/96. U.S. soybean oil prices fell steadily from early 1995 and remained under pressure as exports dropped and stocks built throughout the marketing year. The U.S. soybean oil season-average price declined to 24.75 cents per pound, its lowest in more than 2 years. The 1995/96 soybean oil carryout of 2,010 million pounds was 77 percent above the tight 1994/95 level. Soaring vegetable oil prices in 1994/95 increased the contribution of oil as a percentage of the seed value. This stimulated the worldwide production of high oil-content seeds such as rapeseed and sunflowers in 1995/96. Larger rapeseed crops in Europe and Australia reduced the need to crush as many imported soybeans to satisfy oil requirements. Larger area planted and robust yields pushed India's production of soybeans and rapeseed to record highs. Bumper sunflowerseed harvests in the former Soviet Union and Eastern Europe contributed to less tightness in the world edible oil market. Palm oil, the world's most traded oil, also had a healthy production increase of 6 percent. U.S. cottonseed production in 1995/96 totalled 6.849 million short tons, 9.9 percent below the previous season. Cottonseed yield in 1995/96 was 856 pounds per harvested acre, 25 percent below the previous season and the lowest since the 1983 season. A smaller supply in 1995/96 constrained all offtake components, with crushing down 2.2 percent to 3.861 million tons, other use (primarily whole seed feeding) down 11.4 percent to 2.929 million, and exports down 50.9 percent to 114,000 short tons. The season-average farm price for cottonseed was $107 per short ton, compared with $101 per short ton in the 1994/95 season. The farm gate value of the 1995/96 U.S. cottonseed crop was $731 million. The 1995/96 U.S. peanut crop totalled 3.461 billion pounds, in-shell basis, 18 percent below the previous season. Both the national average quota support rate and national quota poundage in 1995/96 were unchanged from the previous season at $678.36 per short ton and 1.35 million short tons, respectively. Despite lower production in the 1995/96 season, quota peanuts remained in surplus supply with a significant quantity of quota marketed through the Government peanut loan program. The season-average farm price for all peanuts in 1995/96 was 29.3 cents per pound, in-shell, up slightly from the 28.9-cent average in the 1994/95 season. Domestic food use in 1995/96 was 1.993 billion pounds, down 16 million from the previous year and the fourth consecutive year of decline. The farm value of U.S. peanut production in 1995/96 was $1.013 billion, the lowest since the 1985 season. Sunflower acreage declined in 1995 as expected returns for both spring wheat and barley were comparatively favorable and neither had a set-aside requirement. The 1995 U.S. sunflower yield dropped from 1994's bumper yield to 1,190 pounds per acre because of unfavorable growing conditions in all major producing States. Harvested area of all sunflower types in 1995 was nearly 3.4 million acres. Sunflowerseed production fell to 4,009 million pounds, down 17 percent from the large 1994 harvest. Printed copies of the Oil Crops Situation and Outlook Yearbook will be available in about a week. For further information contact Scott Sanford (202) 219-0835. Full text of the report also will be available electronically. For details, call (202) 219-0515. END-OF-FILE