Oilseeds

U.S. soybean supply and use changes for 2017/18 include higher crush, lower exports, and increased ending stocks compared with last month’s report. Soybean crush is raised 10 million bushels to 1,960 million with increased soybean meal exports. Soybean exports are reduced 35 million bushels to 2,065 million with increased production and exports for Brazil. Soybean stocks are projected at 555 million bushels, up 25 million from last month. With increased crush, soybean oil production is raised. An increase in food use is more than offset by lower biodiesel use, leaving domestic disappearance lower this month. Lower biodiesel use reflects lower-than-expected soy oil-based biodiesel production through the first quarter of the marketing year. With increased production and lower use, soybean oil stocks are forecast higher. The season-average soybean price range forecast of $9.00 to $9.60 per bushel is unchanged at the midpoint. Soybean oil prices are forecast at 30 to 33 cents per pound, down 1 cent at the midpoint. Soybean meal prices are projected at $325 to $355 per short ton, up $20.00 at the midpoint. Higher soybean meal prices reflect the impact of sharply lower soybean production in Argentina. Global oilseed production for 2017/18 is projected at 574.5 million tons, down 4.1 million from last month. Argentina soybean production is forecast at 47.0 million tons, down 7.0 million from last month mainly due to lower projected yields resulting from dry conditions through much of the growing region in January and February. Brazil soybean production is raised 1.0 million tons to 113.0 million, reflecting the most recent report from the Brazilian government. Global rapeseed production is projected at 73.9 million tons, up 0.9 million with larger crops for China and Australia partly offset with a smaller crop projected for India. Other changes include higher sunflower seed production for China and Kazakhstan, lower sunflower seed production for Russia, and higher cottonseed production for Sudan. Global oilseed trade for 2017/18 is reduced 1.2 million tons mainly on lower soybean exports. Lower soybean exports forecast for Argentina, the United States, and Uruguay are only partly offset with a higher projection for Brazil. Global soybean crush is raised with higher crush projected for Brazil and the United States partly offset by lower crush in Argentina. Global soybean ending stocks are projected at 94.4 million tons, down 3.7 million from last month. Reduced soybean stocks in Argentina and Brazil are only partly offset by an increase for the United States.

South Asia’s edible oil imports are set to climb to an all-time high this year as lower production in the region coincides with rising consumption to drive buying of mainly palm and soybean oils from elsewhere. India seen importing 15.5 mln T of edible oil in 2017/18. Rising demand, lower oilseed output to drive India imports. Pakistan expected to buy 3.2 mln T of edible oil in 2018.

sunseed stocks in Ukraine totaled 5061.1 KMT on February 1, 2018, i.e. almost 7% less than on the same date last year (5439.3 KMT). This included 2649 KMT stored on farms (down 188.2 KMT, or 6.6% on the year) and 2412.1 KMT held by storage and processing companies (down 190 KMT, or 7.3%). As of February 1, 2018, crusher stocks of oilseeds were down 18.1% year-on-year at 667.6 KMT versus 815.4 KMT they had on February 1, 2017. At the same time, rapeseed stocks were down 24% year-on-year at 66.9 KMT versus 88 KMT on February 1, 2017.

Government has started a national-level project titled ‘Climate Smart Agriculture’ to protect farmers from weather vagaries and increase crop yield as well.The Economic Survey for 2017-18 (Apr-Mar) had suggested ‘Climate Smart Agriculture’ to adopt crops that suit environment of a region and also give more yield while consuming lesser water

In wake of unsatisfactory oilseed production this year, India’s yearly edible oil import bill is estimated to reach around Rs 650 billion fuelled by import of 15 million tonnes of cooking oil. Due to lower production of soybean in India, major exporters such as Argentina, the United States and Brazil will increase their sales of animal feed Asian purchasers namely Bangladesh, Vietnam and Japan. Indian oilseed crushers compete with Indonesia, Malaysia, Brazil and Argentina, reducing demand for local rapeseed and soybeans.

Futures contracts of all components of edible oil basket rose on domestic exchanges. The most-active March contract of soybean closed nearly 2% higher on the National Commodity and Derivatives Exchange due to a pickup in demand from crushing plants. Refined soyoil on the NCDEX and crude palm oil on the Multi Commodity Exchange rose due to robust demand in the wholesale markets. Gains in key crude palm oil contracts on the Malaysian bourse also supported prices on the Indian exchange

In 2017 seaports of Ukraine handled 40.6 MMT of grain, which was 0.6% more than during the same period last year. Handling of vegetable oils in Ukrainian seaports increased 17.7% to 5.5 MMT in 2017, compared to 4.7 MMT over the same period last year. This indicator became a record one, while stable and rapid growth of vegetable oils processing shows prospects of this direction in the port industry of Ukraine. In 2017 Nikolayev, Chernomorsk and Yuzhnyi ports remained the largest ports for vegoil handling in Ukraine

Russian agricultural companies held 2823 KMT of oilseeds as of January 1, 2018, or 201 KMT (6.6%) less than at the same time last year (3024 KMT). Oilseed stocks fell by 873 KMT in December. Farmer sunseed stocks totaled 1620 KMT, or 266 KMT (14.1%) less than at the same time last year (1620 KMT). Sunseed stocks dropped by 562 KMT in December

This month’s 2017/18 U.S. soybean outlook is for reduced exports and increased ending stocks. Soybean exports for 2017/18 are projected at 2,100 million bushels, down 60 million from last month, reflecting shipments and sales through January and increased export competition on larger supplies in Brazil. With soybean crush unchanged, soybean ending stocks are raised 60 million bushels to 530 million. The U.S. season-average soybean price range for 2017/18 is projected at $8.90 to $9.70 per bushel, unchanged at the midpoint. Soybean oil prices are forecast at 31 to 34 cents per pound, down 1 cent at the midpoint. Soybean meal prices are projected at $305 to $335 per short ton, up $5 at the midpoint. Global oilseed production for 2017/18 is projected at 578.6 million tons, down 1.5 million with lower soybean production partly offset by higher cottonseed. Soybean production is reduced 1.7 million tons to 346.9 million. Soybean production for Brazil is projected at 112.0 million tons, up 2.0 million, as favorable weather throughout the growing season has raised yield prospects. Argentina production is reduced 2.0 million tons to 54.0 million on lower harvested area and reduced yields resulting from periods of unseasonable warmth and dryness. Soybean production is also reduced for several other countries including Paraguay, Bolivia, India, Ukraine, and South Africa. Other changes include reduced sunflower seed production for South Africa, increased cottonseed production for China, and lower cottonseed production for India. Global oilseed crush for 2017/18 is projected at 487.5 million tons, down 1.0 million. Reduced soybean crush for Argentina and India accounts for most of the change. Global oilseed stocks are projected lower with reduced soybean stocks for Argentina, Bolivia, Paraguay, and India more than offsetting an increase for the United States.

Social welfare surcharge to make edible oil imports costlier. Govt. announced 10% social welfare surcharge on imports of edible oils, while removing 3% education cess.

The Statistics Committee of the National Economy Ministry of the Republic of Kazakhstan reports that oilseed stocks totaled 1,495.9 KMT as of January 1, 2018, or 30% more (+346 KMT) than as of January 1, 2017 (1,149.9 KMT). A rise was registered in stocks of all main oilseeds. So, sunseed availabilities gained a quarter against the previous year (up 123.5 KMT) and came to 609.2 KMT, linseed stocks increased by 28% to 473.7 KMT (up 103.6 KMT), soybean stocks were up 37% year-on-year (+36 KMT) at 134.3 KMT and rapeseed inventories rose by 56.3% (+71.4 KMT) to 198.2 KMT.

The futures contracts of all components of the edible oil basket rose on the domestic exchanges. The most active February contract of soybean on the NCDEX hit an over 17-month high of 3,589 rupees per 100 kg today, taking cues from spot markets where prices were up due to higher demand from oil millers. The supply of the oilseed is expected to fall in the coming days which is seen supporting the prices

Indian government may raise the import duty on vegetable oils such as refined palm oil and palm olein, sunflower oil and cottonseed oil for the third time since August 2017, amid lobbying by the country’s refiners and to protect local farmers. This move could come ahead of key state and general elections due to be held in 2018 and 2019, to attract farmerr. The government had raised import duties in August 2017 and again in November in the wake of intense lobbying by the Indian refiners, and in order to cater to farmers requests ahead of a key state election in Gujarat.

Bulgaria’s domestic oilseed market still featured sluggish trade during last week. Traders were busy with executing previously signed contracts. Consequently, some 75 KMT of sunseed and 7 KMT of rapeseed were exported over the week, mostly to the EU. Sunseed price closed the week unchanged at BGN 549/MT (USD 336/MT, or up USD 1/MT) and rapeseed price did it at BGN 710/MT (USD 435/MT, or up USD 2/MT).

Futures contracts of all components of the edible oil basket declined on the domestic exchanges.Shrugging off gains from the previous session, April contract of mustard settled 0.6% lower on the National Commodity and Derivatives Exchange owing to tepid buying from oil millers. However, looming fears of a small crop this year due to adverse weather conditions restricted any sharp fall. Soybean on the NCDEX also closed 0.6% lower in line with weakness in the bellwether contracts on the Chicago Board of Trade. Refined soyoil on the NCDEX, and crude palm oil on the Multi Commodity Exchange of India, both traded 0.6% lower due to lacklustre demand at higher prices in the wholesale markets

Russian agricultural companies held 3696.3 KMT of oilseeds as of December 1, 2017, or 311.1 KMT (7.8%) less than at the same time last year (4007 KMT). Oilseed inventories dropped by 311.1 KMT in November. Farmer sunseed stocks totaled 2181.6 KMT, or 322.5 KMT (12.9%) less than at the same time last year (2504.1 KMT). Sunseed inventories dropped by 59 KMT in November.

Oilseed plantings and yields in Almaty region, the Republic of Kazakhstan, gained almost 10%. Total oilseed output exceeded 300 KMT. Roughly 4 KMT was shipped abroad.

Occurrence of heavy rains in the initial sowing stages and moisture stressed situation in the later stages has led to significant decline in production. Production of soybean is seen declining to 10.5 mln tn from 14.2 mln tn. Groundnut production is seen falling 9.9% on year to 5.9 mln tn. The first estimate in September had pegged output for the oilseed lower at 5.7 mln tn.

A new oil extraction plant is to be built in Kostanay region of the Republic of Kazakhstan. Its capacity equal 7 KMT of finished products a year. Three plants of this sort already operate in the region.

Total U.S. oilseed production for 2017/18 is projected at 132.2 million tons, up slightly due to a small increase in cottonseed. Soybean exports are reduced 25 million bushels to 2,225 million on stronger-than-expected competition from Argentina and Brazil during the first quarter of the marketing year. Soybean ending stocks for 2017/18 are projected at 445 million bushels, up 20 million from last month and still the highest since 2006/07. Following the December 5, 2017 affirmative determination by the U.S. International Trade Commission regarding countervailing duties on biodiesel imports from Argentina and Indonesia, Soybean oil used for domestic production of methyl ester is raised 500 million pounds to 7.5 billion. Reduced Soybean oil exports and non-ester domestic use are offsetting, leaving projected ending stocks unchanged at 1.62 billion pounds. The U.S. season-average Soybean price range for 2017/18 is narrowed to $8.60 to $10.00 per bushel. The Soybean meal and Soybean oil price ranges are unchanged at $295 to $335 per short ton and 32.5 to 36.5 cents per pound, respectively. The global oilseed supply and demand forecasts for 2017/18 include higher production, exports, and ending stocks compared to last month. Global production is forecast at 579.5 million tons, up 0.7 million mostly reflecting higher Rapeseed, Peanut, and palm kernel production. Rapeseed is increased 0.8 million tons to 72.9 million as reductions for Australia and India are more than offset by a 1.6-million-ton increase for Canada based on recent government estimates. Peanut production is raised for Senegal on higher area and yields. An increase in EU sunflower seed production is offset by lower production for Russia and Argentina. Other production changes include higher palm oil for Indonesia and Thailand and lower palm oil for Malaysia. Global oilseed exports for 2017/18 are raised 0.5 million tons to 176.3 million with higher Soybean exports for Argentina and Brazil and higher Rapeseed exports for Canada. Partly offsetting are lower Soybean exports for the United States and Canada, and lower sunflower seed exports for Argentina. Global Soybean stocks are up 0.4 million tons to 98.3 million, with lower stocks in South America offset by higher stocks in the United States, Canada, and the EU.