A brief look at oilseed markets

April 2019

Ikageng Maluleke, Junior Economist, Grain SA. Send an email to Ikageng@grainsa.co.za

In this article we take a look at what is happening in the oilseed markets and especially focus on soybeans in terms of supply and demand.

GLOBAL SOYBEAN MARKETS 
The global soybean outlook for 2018/2019 marketing year, forecasts that there will be lower production, exports, crush and ending stocks. Global production is estimated to be 361 million tons compared to 369 million tons from prior estimates, mainly due a lower crop in Brazil, Argentina, Paraguay, Uruguay and South Africa. 

Global soybean exports are reduced by 1,7 million tons to 154,4 million tons. Lower exports for Brazil, Uruguay and Paraguay are partly offset by higher exports for Argentina. Global imports are also reduced mainly on a 2 million-ton reduction for China due to lower crush demand. Global ending stocks are estimated to be lower due to crop related changes as well as historical stock revisions in Brazil and Argentina.

USA OILSEED MARKET 
USA oilseed production has been revised down for 2018/2019, with an estimated 134 million tons compared to 135,5 million tons for the previous estimate. The lower estimate is due to smaller soybean, canola, peanut and cotton seed. 

USA soybean production is estimated at 123 million tons, down from 123 million tons from the previous estimate, with a harvested area of about 35 million hectares. USA soybean crushing is forecasted to increase while soy meal production will remain unchanged. A reduction in exports is expected due to lower supplies and increased crushing, while ending stocks are projected to be lower than the previous estimate.

LOCAL SOYBEAN MARKET
Dry conditions have disrupted the soybean planting period, which led to smaller hectares planted than what the Crop Estimates Committee (CEC) has initially estimated (851 800 hectares compared to 743 600 hectares). 

Total supply of soybean in South Africa is projected at 1,8 million tons for the 2018/2019 marketing season; including opening stocks (at 1 March 2018) of 330 535 tons, local commercial deliveries of 1,5 million tons, soybean import of 6 700 tons for South Africa and a surplus of 11 000 tons. 

Total demand for South Africa, including domestic and exports for soybeans is projected at 1,3 million tons; including 25 000 tons for human consumption, 210 000 tons for animal consumption, 1 million tons for crush (oil and oilcake) and the rest of the balance constitutes, amounts withdrawn by producers and released to end consumers, seed etc. Exports are projected to reach about 33 000 tons for 2018/2019. Ending stocks for the 28 February 2019 are projected to be about 500 000 tons.

Publication: April 2019

Section: Pula/Imvula