OIL CROPS OUTLOOK August 14, 2000 August 2000, OCS-0800 Approved by the World Agricultural Outlook Board ------------------------------------------------------------------------------- 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 2000 will be released on October 23, 2000. Yearbooks are available in print from ERS-NASS Order Desk. For the 2000 issue, call 1-800-999-6779 (703-605-6220) and ask for stock #ERS-OCS-2000, $21. -------------------------------------------------------------------------------- Bumper U.S. Harvest Will Support Record 2000/01 Soybean Exports Good precipitation and an absence of extreme heat in July have resulted in generally favorable conditions for U.S. soybeans. As of August 6, 65 percent of soybeans were rated in good to excellent condition. This ratio is the best since the U.S. record yields of 1994. Like that year, current pod development is quite advanced, with 69 percent now in that stage compared with the 5-year average of 47 percent. Moisture availability at this time is a key factor for filling out soybean pods. Provided no extended hot spell soon emerges, most regions should need little additional precipitation, as there are adequate soil moisture reserves to complete crop maturation. Record soybean crops are anticipated in Iowa, Illinois, Kansas, Nebraska, Wisconsin, North Dakota, Pennsylvania, Minnesota, Indiana, Missouri, and Michigan, with record average yields in the latter four States. On the other hand, much of the Southeast still suffers from a moisture deficit, and the dryness has extended into the Delta region. In spite of crop stress in these locations, a national average soybean yield of 40.7 bushels per acre is expected this year, exceeded only by the 1994 yield of 41.4 bushels. These southern regions collectively comprise just 9 percent of the total soybean acreage planted this year. Therefore, U.S. soybean production in 2000 is forecast to rise to 2,989 million bushels, surpassing the 1998 record of 2,741 million. Smaller expected beginning stocks, totaling 280 million bushels, will offset some of the yield gains. Stocks have declined because of seasonally strong import demand from China that has raised the 1999/2000 U.S. soybean export forecast to 975 million bushels. For similar reasons, projected South American carryover stocks are also tightening. Adverse weather will maintain brisk imports by China and push U.S. soybean shipments toward a record 1,010 million bushels in 2000/01. Slightly higher margins are projected to raise 2000/01 domestic soybean crush to 1,625 million bushels. U.S. soybean meal exports are forecast to rise to 7.4 million short tons. European Union (EU) soybean meal imports are likely to modestly strengthen because of a sharp decline in rapeseed production. U.S. soybean oil exports should also expand to 1,800 million pounds from 1,200 million in 1999/2000. The fine condition of the U.S. soybean crop has caused the average cash price in central Illinois to fall from $4.92 per bushel in June to $4.56 in July. Prices may continue declining if favorable weather this month allows an optimal completion of pod filling. Based on the current soybean supply and use forecasts, USDA foresees a 2000/01 average U.S. farm price of $3.90-$4.80 per bushel. The southern drought will have a larger impact on national production of peanuts than it will for soybeans. The brunt of the damage is in Alabama, where 77 percent of peanuts were rated poor to very poor. Georgia and Florida also suffered early dryness, but beneficial rains in late July prevented further crop deterioration. Expanded peanut acreage and good yields in the Southwest (where 60-65 percent of the peanut acreage is irrigated) will partly offset lower production in the Southeast. U.S. yields are forecast down to 2,587 pounds per acre compared with 2,667 pounds last year. Peanut production is expected to decline 1 percent this year to 3,792 million pounds. An increase in the abandonment of dryland cotton acreage, also due to adverse growing conditions in the South, lowered this year's estimated cottonseed production to 7.2 million short tons. Although the reduced cottonseed output would still be 0.9 million tons greater than last year, fewer supplies would tighten up 2000/01 season ending stocks and moderate gains in crush and feed demand. Dry Weather Cuts China's Soybean Crop Potential; Raises Import Outlook In July, precipitation was 50-75 percent of average in much of northeastern and northern China, which include major soybean producing provinces of Jilin, Liaoning, Inner Mongolia, and Shandong. Near-normal precipitation in late July stabilized conditions in Heilongjiang, China's largest soybean producing province, but April-June rainfall had been below average. Together, these five provinces account for approximately 55 percent of China's soybean area and nearly all of the expansion in this year's plantings. At this time, the drought's likely damage to yield potential cuts the U.S. Department of Agriculture's (USDA) forecast of China's 2000 soybean production from 15.8 million metric tons to 15.0 million. The estimate would still exceed last year's soybean output of 14.3 million tons, based on a 14-percent increase in planted area. Similarly, the country's peanut and sunflowerseed harvests were forecast lower to 12.5 million and 1.3 million tons, respectively. USDA raised its forecast of China's 1999/2000 soybean imports to 9.0 million tons this month. The torrent of imports has recently softened domestic soybean prices, yet they remain above prices of a year ago due to the heavy demand. The domestic crop is larger than in 1999 and a larger estimated carryover of soybean stocks is anticipated to slow 2000/01 soybean imports. However, low international prices will support robust crushing and a scaled back domestic harvest should keep China's soybean imports at a relatively strong 7.25 million tons. Soybean meal imports are seen moderating to 1.0 million tons. As a consequence of China's imports, the volume and composition of exports from the United States and South America will be greatly influenced. Brazilian soybean exports for 2000/01 are forecast up 0.5 million tons from a month ago to 9.4 million. The strength of foreign soybean demand will curtail supplies available for domestic crushing, which is expected to rise just 2 percent to 21.6 million tons. Although more normal weather and yields are anticipated to boost Brazilian soybean production next year, supplies will be squeezed for crushers, which are mostly located in southern Brazil. Following Brazil's 1999 devaluation, it became more profitable for producers in the center-west states of Brazil to export abroad than to supply southern crushers. The imposition of interstate sales taxes reduces the values that these processors can pay for soybeans outside their own state. Projected Brazilian soybean meal exports are trimmed to 10.3 million tons, although still above the 1999/2000 forecast of 9.9 million. Soybean processors in Argentina will face constraints similar to those in 1999/2000. Swelling U.S. supplies and relatively soft international demand for soybean meal and oil will continue to limit Argentine crushing. Yet, Argentine exports of soybeans should stay at a comparatively high level of 4.2 million tons. Adverse Weather Shrinks European Oilseed Harvests Excessive rain during July has caused harvest losses for rapeseed in northern France and western Germany. These complications followed drier than normal spring weather. The 2000 EU rapeseed crop was estimated down from last month's 9.9 million tons to 9.4 million. Greater soybean meal imports should offset the smaller domestic rapeseed crops, as rapeseed imports from outside the EU are not likely. Consequently, world trade in rapeseed (which is heavily EU oriented) is forecast down 13 percent from 1999/2000 to 9.7 million tons. For 2000/01, EU soybean meal imports are projected up 0.8 million tons from last month's forecast to 19.7 million. Imports of soybeans, at 16.4 million tons, are projected slightly higher than the July forecast but still less than the 16.8 million forecast for 1999/2000. The next release of the Oil Crops Outlook is scheduled at 4:00 p.m. ET Wednesday, September 13, 2000. 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--Cottonseed, peanuts (202) 694-5313 skinner@ers.usda.gov Table 1--Soybeans: U.S. supply and disappearance ------------------------------------------------------------------------------ Supply Disappearance ------------------------------ ------------------------------------ Year Seed, begin. Beg. Im- Produc- Total Crush Ex- feed, Total End. Sept. 1 stocks ports tion ports residual stocks ------------------------------------------------------------------------------ -------------------------- Million bushels--------------------------- 1998/99 200 3 2,741 2,944 1,590 801 205 2,596 348 1999/00 1/ 348 3 2,643 2,994 1,570 975 170 2,715 280 2000/01 2/ 280 5 2,989 3,273 1,625 1,010 173 2,808 465 ------------------------------------------------------------------------------ 1/ Estimated. 2/ Forecast. Table 2--Soybean 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-------------------------- 1998/99 218 100 37,792 38,110 30,662 7,117 37,780 330 1999/00 1/ 330 60 37,335 37,725 30,400 7,000 37,400 325 2000/01 2/ 325 65 38,535 38,925 31,250 7,400 38,650 275 ------------------------------------------------------------------------------ 1/ Estimated. 2/ Forecast. Table 3--Soybean 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 1,382 82 18,081 19,546 15,655 2,372 18,027 1,520 1999/00 1/ 1,520 90 17,765 19,375 16,300 1,200 17,500 1,875 2000/01 2/ 1,875 90 18,445 20,410 16,650 1,800 18,450 1,960 ------------------------------------------------------------------------------ 1/ Estimated. 2/ Forecast. Table 4--Cottonseed: U.S. supply and disappearance ------------------------------------------------------------------------------ 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/ 393 130 6,354 6,877 3,125 190 3,377 6,652 225 2000/01 2/ 225 46 7,209 7,480 3,200 180 3,600 6,980 500 ------------------------------------------------------------------------------ 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 1,175 121 1,295 24 1999/00 1/ 24 0 1,430 1,454 1,320 105 1,425 29 2000/01 2/ 29 0 1,440 1,469 1,305 120 1,425 44 ------------------------------------------------------------------------------ 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 4.0 985 1,065 850 130 980 85 2000/01 2/ 85 5.3 1,025 1,115 885 135 1,020 95 ------------------------------------------------------------------------------ 1/ Estimated. 2/ Forecast. Table 7--Peanuts: U.S. supply and disappearance ------------------------------------------------------------------------------ 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/ 1,392 169 3,829 5,390 2,246 715 419 710 4,090 1,300 2000/01 2/ 1,300 169 3,792 5,261 2,305 715 415 725 4,161 1,100 ------------------------------------------------------------------------------ 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 1/ 4.65 90.00 7.05 25.60 3.80 1998/99 September 5.25 120.00 11.50 29.90 5.09 October 5.18 120.00 10.80 29.00 4.87 November 5.39 133.00 10.70 24.60 4.97 December 5.37 138.00 11.00 27.20 5.00 January 5.32 139.00 11.50 NA 5.05 February 4.80 136.00 12.00 NA 5.05 March 4.61 NA 10.80 NA 4.94 April 4.63 NA 9.62 NA 4.93 May 4.50 NA 9.80 NA 4.89 June 4.44 NA 9.54 NA 4.38 July 4.19 NA 9.09 NA 4.40 August 4.39 70.00 8.28 NA 3.86 1999/2000 September 4.57 72.00 8.41 27.00 4.00 October 4.47 89.00 6.77 25.40 3.76 November 4.45 94.00 6.85 23.90 3.66 December 4.44 99.00 7.08 21.60 3.61 January 4.62 101.00 7.28 14.60 3.75 February 4.79 108.00 8.77 NA 3.39 March 4.91 NA 8.52 NA 3.70 April 5.00 NA 7.98 NA 3.65 May 5.19 NA 7.79 NA 3.75 June 4.92 NA 8.17 NA 3.64 July 1/ 4.48 NA 8.56 NA 3.45 -------------------------------------------------------- 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 1/ 15.70 21.70 16.90 33.70 21.00 1998/99 October 25.20 33.99 NA 45.40 29.46 November 25.20 34.16 NA 45.00 29.65 December 24.00 33.40 26.70 44.25 29.88 January 22.90 31.72 23.40 44.00 29.15 February 20.00 28.21 19.86 39.75 26.58 March 19.50 26.27 19.10 34.75 23.01 April 18.80 24.39 19.10 35.20 23.08 May 17.85 24.25 19.90 35.00 22.96 June 16.50 25.19 18.80 37.75 22.95 July 15.30 24.70 17.10 39.00 22.43 August 16.50 21.39 18.75 38.75 22.41 September 16.80 20.22 18.75 38.00 22.08 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 15.53 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 1/ 14.70 21.03 14.68 35.63 13.55 ------------------------------------------------------ 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 1/ 165.00 118.00 67.50 145.00 94.50 1998/99 October 135.70 106.50 50.00 161.00 83.75 November 144.50 107.90 50.00 100.00 92.50 December 146.40 119.75 80.90 103.75 102.50 January 138.80 110.60 77.50 105.00 95.00 February 132.30 101.25 73.75 102.50 87.25 March 133.00 106.90 70.00 91.25 83.00 April 134.50 110.90 70.00 94.50 82.50 May 133.20 108.75 70.00 93.75 80.60 June 139.10 114.50 57.00 100.00 80.00 July 132.70 115.00 62.50 100.00 75.00 August 141.70 100.65 60.00 105.00 71.25 September 150.65 111.92 61.25 102.50 80.00 1999/2000 October 153.57 111.83 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 170.85 130.50 70.20 104.75 92.60 March 175.50 129.38 77.50 110.00 108.75 April 177.53 125.00 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 1/ 163.38 131.25 87.50 118.00 115.15 ----------------------------------------------------------------------- 1/ Preliminary 2/ Hi-pro Decatur 3/ 41% Memphis 4/ Minneapolis 5/ 50% SE mills END_OF_FILE