USDA lowers global oilseed production forecast due to drought in Argentina and Paraguay

According to the February report from the U.S. Department of Agriculture (USDA), the global oilseed production forecast for this month has been reduced by 2.7 million tons to 677.7 million tons due to lower soybean yields in Argentina and Paraguay, which are not offset by increased cotton production in China and sunflower production in Kazakhstan.

Trade remained unchanged at 207.3 million tons, with increased rapeseed exports from the United States compensating for the decrease in sunflower exports from Argentina.

Ending stocks of oilseeds have been reduced by 4.3 million tons to 140 million tons due to lower soybean stocks in Argentina and Brazil, as well as lower sunflower and peanut stocks in Argentina.

Global processing volume has been increased by nearly 600,000 tons to 561.3 million tons due to higher soybean processing in Brazil, while soybean processing in Paraguay has been reduced.

Global trade in meal has increased by 700,000 tons to 108.1 million tons due to increased soybean meal exports from Brazil, despite decreased supplies from Paraguay. With minor changes in soybean exports, global ending stocks have decreased by 4 million tons to 124.3 million tons due to lower stocks in Argentina and Brazil.

Global soybean production is increasing due to higher production in Brazil. This is driven by favorable processing profitability, high demand for biofuels, and current soybean meal export rates.

The report also highlights the shift in imports of medium-protein meals to China. In recent years, China has sought to diversify its supplier base and ensure stable food supply for its population. However, despite efforts to diversify suppliers, soybean imports to China remain concentrated among three main suppliers. Imports of alternative protein products have increased but remain low compared to soybeans. In physical terms, China’s dependence on imported soybeans continues to grow. A moderate shift to other protein sources, such as rapeseed and sunflower meal, has had little impact on the growing dependence on soybeans from Brazil, while soybean imports from the United States continue to decline.

The increased consumption of other protein products has led to a decrease in the consumption of meal from imported soybeans to 87% in 2023/24. Imports of other protein meals for small and medium-sized businesses more than doubled during this period, mainly due to increased imports of sunflower and rapeseed meal. China began importing significant amounts of sunflower meal in 2018/19, primarily from Ukraine and Russia. Similarly, rapeseed meal imports, mainly from Canada, have reached significant volumes in recent years.

China’s share of soybean imports from Brazil increased from 62% in 2017/18 to 71% in 2023/24, while the share from the United States decreased from 30% to 22%.

Tags: rapeseed, crop forecast, soybean, USDA Report, sunseed