USDA has raised its forecast for global oilseed production, including sunseed in Ukraine, which will increase pressure on prices

In the March supply and demand report, USDA experts increased the forecast for world oilseed production in 2024/25 MY by 1.67 million tons to 679.37 million tons (657.1 million tons in 2023/24 MY), in particular sunflower – by 0.9 million tons, rapeseed – by 0.39 million tons, cotton – by 0.2 million tons, while the forecast for soybean production remained unchanged. Due to the increase in the estimate of oilseed processing in 2024/25 MY by 1.8 million tons, the forecast for world ending stocks was reduced by 0.9 million tons to 139.14 million tons, which will exceed the previous season’s figure by 6.2 million tons.

Compared to February estimates, the world soybean balance for the 2024/25 MY has undergone the following changes:

• The initial reserve estimate was left at 112.55 million tons (101.24 million tons in 2023/24 MY).
• The global production forecast is left at 420.76 million tons (394.97 million tons in 2023/24 MY and 378.4 million tons in 2022/23 MY) due to improved weather conditions in South America.
• The global consumption forecast has been increased by 3 million tons to 409.16 million tons (384.3 million tons in 2023/24 MY), in particular for China – by 2 million tons to 128.9 million tons (due to increased domestic processing), and Argentina – by 1 million tons to 49.6 million tons.
• Estimates of world exports and imports were left at 181.95 (177.62) million tons and 179.2 (178.11) million tons, respectively.
• The forecast for world ending stocks has been reduced by 2.93 million tons to 121.41 million tons, in particular for China – by 2 million tons and Argentina – by 1 million tons, which will be 7.9% higher than the previous season’s figure (112.55 million tons).

According to the report, March soybean futures in Chicago fell by 0.2% to $366.6/t (-4.5% compared to data after the February report), and May futures fell to $371.6/t.

Rains in South America have improved crop conditions, so soybean harvest estimates for Argentina and Brazil may be increased in the April forecast.

The forecast for global rapeseed production in 2024/25 MY has been increased by 0.39 million tons to 85.69 million tons (89.86 million tons in 2023/24 MY), in particular for Australia – by 0.44 million tons to 5.94 million tons, which will almost correspond to the level of the previous season (6.05 million tons). The forecast for rapeseed exports from Australia has been increased by 0.3 million tons to 4.85 million tons, and imports to the EU – by 0.15 million tons to 7 (5.45) million tons. The estimate of global ending rapeseed stocks has been increased immediately by 1.48 million tons to 9.08 (10.98) million tons, in particular for China – by 0.7 million tons and the EU – by 0.4 million tons due to a reduction in domestic processing.

According to the report, May rapeseed futures on the MATIF exchange in Paris fell by 0.4% to €480/t or $523/t, although they fell by 13% in the month amid the imposition of tariffs on Canadian canola by the US and China, which caused May canola futures on the Winnipeg exchange to fall by 7.3% during the month to CAD591.8/t or $410/t.

The forecast for world sunseed production in the 2024/25 MY has been increased by 0.9 million tons to 52.02 (56.02) million tons, in particular for Ukraine – by 0.5 million tons to 13.4 (15.5) million tons, Russia – by 0.35 million tons to 16.9 (17.1) million tons, while for Argentina the estimate was left at 4 (3.9) million tons. The forecast for world consumption has been increased by 0.57 million tons to 55.49 (56.78) million tons, and the estimate of ending stocks – by 0.48 million tons to 2.72 (3.28) million tons.

In Ukraine, prices for sunseed with 50% oil content, after a wave of growth, have decreased to UAH 25,500–26,500/t delivered to the factory. Farmers continue to restrain sales, which supports prices for sunflower oil at $1,100–1,120/t delivered to the port.

Falling palm and soybean oil prices, as well as increasing supplies of sunflower oil from Argentina, will increase pressure on prices in the coming weeks.