USDA: Oilseed production confirmed at reduced level - prices pick up In its February issue, the US Department of Agriculture (USDA) only slightly increased global oilseed production at the reduced level of the previous month's estimate. Global production is estimated at 577 million t, consumption at 498 million t. The surplus stocks increase to 114 million t. This provides a good average supply situation. The oilseed business is largely determined by the soy market with a production share of almost 60%. However, the weak US soybean harvest in 2019 somewhat reduced supply in this submarket. Nevertheless, an adequate supply is secured by the reduction of the accumulated high US stocks. The current market situation is decisively influenced by the Brazilian crop that has just started. The USDA estimates that the record level in Brazil rose again from 123 to 125 million t. Bean exports from the South American country are expected to increase to 77 million tons; in addition there are 15.4 million tons of soybean meal.The Argentine soybean harvest is classified at below average 53 million t, of which 31 million t soybean meal is exported. China dominates on the demand side with an import volume of around 88 million tons . 60% the market and price events. It remains to be seen whether the ASP and corona virus epidemics will continue to disrupt business operations. The Chinese have so far not realized contractually guaranteed higher US purchases. A strong dollar rate and relatively high purchase prices do not make the US goods particularly attractive for shopping. And the high Brazilian harvest is coming. Despite a declining backlog, the supply situation in 2019/20 in the soy sector remains above average. The global rape harvest 2019/20 is again weaker than in the previous year. However, with less than 15%, the production share is only decisive for pricing.The extensive exchange options between the oilseeds mean that shortages in sub-markets can be compensated for. The other oilseeds such as sunflowers, cottonseeds and peanuts are only of regional importance in terms of market and price. 70% of the oil meal market is dominated by soybean meal . Around 68 million tons of grist are to be exported. Argentina supplies almost half of this with 31 million t. Other exporting countries are Brazil with 15 million tons and the USA with 12 million tons. The largest grist importer is the EU with 19 million tons of soybean meal. The main supplier countries are Argentina followed by Brazil. In view of the upcoming high South American harvests, a sufficiently secure 2019/20 soy supply can be expected. The market for vegetable oils is managed by the two market leaders palm and soybean oil with a production share of approx. determined two thirds.Due to the high price value of palm oil, this product is of greater importance in terms of market and price. Palm oil will be scarce this year. Production in the two main growing regions of Indonesia and Malaysia is growing only half as strongly as the demand. In particular, the 30% blending share of biodiesel in Indonesia, which has increased since this year, ensures a rapid reduction in inventories and a strong reduction in export potential. The ratio of final inventory to consumption is expected to drop to the lowest level in 25 years. The palm oil prices have already seen a strong rise in prices in January 2020. The relapse at the turn of the month of February was short-lived. The latest developments point to an at least sustained high price level. Such a development provides support for oil-stressed oil seeds such as rapeseed. The level of such a price development will largely depend on the crude oil prices .
