The USDA lowered its forecast for oil production and processing, but raised its stock estimate

The forecast for world soybean production is lowered for the fourth month in a row amid a drought in South America, which leads to lower forecasts of world production of oilseeds. However, due to reduced processing of soybeans in China and sunflower in Ukraine and Russia, world oil reserves will grow.

Compared to the March report, the new balance of oilseeds for 2021/22 MY has undergone the following changes:

• The forecast for world oil production was reduced by 2.4 million tons to 599.21 million tons (605.68 million tons in 2020/21 MY), although the decline in soybean yields in Brazil will be partially offset by increased palm production in Malaysia and Indonesia.
• The estimate of world exports was reduced by 3.64 million tons to 177.68 million tons (191.43 million tons in 2020/21 MY) due to reduced supplies of soybeans from Brazil by 2.75 million tons and Paraguay by 0.7 million tons.
• The forecast of world imports was reduced by 4.49 million tons to 174.14 million tons (190.06 million tons in 2020/21 MY) due to the reduction of soybean imports to China by 3 million tons and Argentina by 0.7 million tons.
• The estimate of world processing was reduced by 3.47 million tons to 510.54 million tons (507.98 million tons in 2020/21 MY) amid a reduction in soybean processing in China by 3 million tons.
• The forecast of the world’s final reserves increased by 2.07 million tons to 106.41 million tons, which will be 11.15 million tons lower than last year, although soybean and rapeseed reserves will decline and sunflower will grow.

The balance of soybeans was changed as follows:

• The estimate of world production was reduced by 3.1 million tons to 350.7 million tons (367.76 million tons in 2020/21 MY and 339 million tons in 2019/20 MY), in particular for Brazil – by 2 million tons to 125 million tons (138 million tons in 2020/21 MY) and Paraguay – 1.1 million tons to 4.2 (9.9) million tons.
• The consumption forecast was reduced by 1.8 million tons to 361.88 million tons (362.08 million tons in 2020/21 MY).
• The estimate of final stocks was reduced to 89.58 million tons (103.11 million tons in 2020/21 MY), primarily due to reduced stocks in the United States and Argentina.

The balance of sunflower for 2021/22 MR has also changed:

• The forecast of world production was increased by 0.05 million tons to 57.31 million tons (49.3 million tons in 2020/21 MY) due to increased yields in the EU. At the same time, the forecast for sunflower oil production was reduced by 0.72 million tons to 20.393 (19.07) million tons due to the war in Ukraine, which shut down many enterprises.
• The estimate of world exports was reduced by 0.544 million tons to 2.546 (2.911) million tons, in particular for Russia – by 0.3 million tons to 0.25 million tons, for Ukraine – by 75 thousand tons to 75 thousand tons (although Ukrainian experts expect intensification exports against the background of stopping processing plants).
• The forecast of world imports was reduced by 0.544 million tons to 2.172 (2.734) million tons, in particular for Turkey by 0.2 million tons and the EU by 0.18 million tons.
• The estimate of world processing was reduced by 1.75 million tons to 52.921 (49.517) million tons, in particular for Ukraine – by 1.6 million tons to 13.8 million tons.
• The forecast of the world’s final reserves increased by 2.18 million tons to 6.478 million tons, which is .01 million tons more than last year due to the growth of reserves in Ukraine by 1.6 million tons to 3.8 million tons (141 thousand tons last year).

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Tags: soybean, USDA Report, Malaysia, rapeseed, Ukraine, USA, Russia, crop condition, China, sunflower, Turkey, grain, Brazil