USDA: Oilseeds Production to Increase, Exports Decrease, Forecast

According to the USDA’s May forecast, in 2023/24 MY global oilseeds production will increase by 7% compared to the current season due to higher soybean harvest in South America and sunflower in the EU, Ukraine and Russia. At the same time, global consumption of oilseeds will increase by only 4%, which will lead to the growth of ending stocks.

Sunflower production may increase

USDA experts increased the forecast of global sunflower production in 2022/23 MY by 1.2 mln tonnes to 51.64 mln tonnes, in particular, for Ukraine – by 0.8 mln tonnes to 11.2 mln tonnes and Argentina – by 0.4 mln tonnes to 4.2 mln tonnes. At the same time, they lowered the forecast of sunflower imports to the EU by 0.4 to 2.3 mln tons. For the second month in a row, the export estimates for Ukraine were not significantly reduced, and in May the export forecast was decreased by only 0.1 to 2.55 mln tonnes, although due to the ban of domestic sunflower to 5 EU countries, the exports decreased from 200 thsd tonnes in March to 40 thsd tonnes in April, and totaled 1.9 mln tonnes in 2022/23 MY.

In 2023/24 MY, the global sunflower production is expected to increase from 51.6 mln tonnes to 54.3 mln tonnes compared to the current season, in particular, in Ukraine – from 11.2 mln tonnes to 11.8 mln tonnes, in the EU – from 9.3 mln tonnes to 11.5 mln tonnes, in Russia – from 16.2 mln tonnes to 16.5 mln tonnes, in Kazakhstan – from 1.3 mln tonnes to 1.4 mln tonnes, while in Argentina it will decrease from 4.2 mln tonnes to 3.9 mln tonnes.

Exports may decrease

At the same time, according to the USDA forecast, the exports of sunflower in the new season will decrease from 5.3 mln tonnes to 3.6 mln tonnes, in particular, from Ukraine – from 2.55 mln tonnes to 0.7 mln tonnes, and the ending stocks will decrease from 4.4 mln tonnes to 3.7 mln tonnes, which is twice lower than in 2021/22 MY – 8 mln tonnes. In Ukraine, the stocks will decrease from 1.37 to 0.48 mln tonnes, in Russia – from 1 to 0.9 mln tonnes, and in Argentina – from 0.9 to 0.8 mln tonnes amid increased processing.

Currently, the sunflower market in Ukraine is at a stalemate: processors have stopped production because they cannot ship oil through the Black Sea ports, and the EU market is overstocked, which has caused sunflower oil prices to fall to $750-780/t FCA. At the same time, amid the shutdown of factories and shortage of supply, as well as a seasonal increase in demand from feed producers, prices for meal and oil cake rose to 243.15 USD/t. The purchase prices for sunflowers fell to 378.23-405.24 USD/t with delivery to the plant, and they can only be supported by the resumption of exports from the Black Sea ports.

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