Global Markets: Oilseeds – Demand Growth Forecast to Outpace Production

Global oilseed production is forecast to grow slightly in 2017/18. Soybean production is projected to decline from the current year’s record level, with both Brazil and the United States forecast to see year-over-year declines in production, as yields fall to historical trend levels.

All other major oilseeds are expected to see larger production. Rapeseed area is forecast to rise with production expected to rebound modestly following the decline observed in 2016/17. Sunflowerseed, peanut, and copra production is projected to grow slightly. Cottonseed and palm kernel production are both expected to see a robust jump in 2017/18.

Global oilseed consumption is forecast to rise, led by strong growth in China’s soybean crush, which is projected to increase 4 percent. Soybean demand is expected to grow at a solid rate, with domestic consumption rising faster than production, thereby reducing stock building.

Consumption of other oilseeds is expected to increase as well, especially in cottonseed, palm kernel, and rapeseed where supply growth is greatest.

Global oilseed trade is forecast up on increased demand from China. Ending stocks are projected to remain nearly unchanged in 2017/18, as strong demand growth exceeds production growth. However, large carry-over from this year’s record crops in the U.S. and Brazil assure adequate supplies will be available even if yields fail to reach trend levels.

Rapeseed, cottonseed, and palm kernel ending stocks are forecast to grow, while stocks of peanuts and sunflowerseed are projected to decline. Copra ending stocks will remain flat.

Global oilseed meal production is expected to see a robust rise in 2017/18. Global protein meal consumption is also forecast to rise, mainly driven by strong demand from major markets such as China. Trade in protein meals is expected to grow as well, with soybean meal exports forecast to increase slightly over the current year.

Both rapeseed and palm kernel meals are projected to see a strong jump in exports while sunflowerseed meal is forecast to fall. Trade in other meals will be largely unchanged in 2017/18. Meal ending stocks are forecast lower, led by a large decline in soybean meal stocks.

Global vegetable oil production is expected to grow modestly, with all major oils forecast to see increases in production. Palm, palm kernel, rapeseed, and cottonseed oil production are all expected to see a healthy jump, on higher crop estimates. Strong soybean meal demand will spur higher crush volumes and increased soybean oil production. Olive oil production is forecast to make a significant recovery from the current marketing year.

Global vegetable oil consumption for food is forecast to expand, reflecting population and GDP growth in emerging economies. Growing food use will primarily be met by palm and soybean oil, followed by sunflowerseed and rapeseed. Global consumption of oils for industrial use is also forecast to increase, in line with growing biodiesel production in major markets.

Global vegetable oil trade is expected to increase slightly, with strong growth in rapeseed and soybean oils offset by reductions in cottonseed and coconut oil. Global ending stocks are forecast to grow, mostly in palm oil. Resolute demand for golden oils, which outpaces production, will result in a decline in stocks of soybean, rapeseed, and sunflowerseed oil.


Global soybean production in 2017/18 is forecast to decline to 345 million tons. This is 3 million tons below the record production projected for 2016/17, and reflects a lower yield for the coming year. Harvested area is forecast to expand nearly 5 percent with much of this increase occurring in the United States.

Planting intentions in the United States indicate a 7 percent rise in soybean area to a record 35.9 million hectares. However, a lower trend yield will result in a slight decline in production yet the coming harvest is projected to be the second largest on record. An even larger percentage increase is expected in Canada, augmented by the continued expansion of soybean plantings in western Canada.

Both harvested area and production are expected to set records this year. Acreage in South America, for harvest in 2018, is forecast to rise more slowly in comparison. Most producing countries will see a 2 percent increase in growth though reduced trend yields will result in a 3 percent decline in production.

Elsewhere, soybean production in China is forecast to rise to its highest level in 6 years in response to acreage expansion while production in Ukraine is projected to reach a record 4.6 million tons following record plantings.

Despite the decline in global production, total global soybean supply is projected to rise 3 percent with record carry-over from 2016/17. However, continued growth in global demand will likely push disappearance to the level of production leading to stock draw-downs in the coming year. The global stocks/use ratio, though reduced from the current year, will remain at an elevated level, indicative of abundant reserve supplies.

Global imports are forecast to rise a bit over 3 percent in 2017/18 in response to increases in China, other Asia and the Middle East. In addition, imports by the European Union are expected to rise, helping maintain import levels nearly 2 million tons above those seen earlier in the decade.

Brazil and the United States will continue to be the main global soybean suppliers. Brazil’s soybean exports are projected to exceed those of the United States for the second year in a row. However, both the United States and Brazil are forecast to export record levels.

Global soybean meal trade is forecast to grow 3 percent in 2017/18, nearly unchanged from last year’s projected pace and near long-term growth trends. Growing soybean imports, especially in markets that import both soybeans and meal, will provide some downward pressure on trade growth along with abundant supplies of competitively priced feed grains.

Argentina will continue to be the largest exporter. Soybean supplies in Argentina will be more than adequate to meet processor demand though some uncertainty exists regarding producer willingness to sell in light of the progressive reduction in export taxes expected to begin in 2018.

Regardless, Argentina, Brazil and Bolivia will account for the largest portion of global export growth. In Bolivia, improved soybean production prospects will allow meal production to return to pre-drought levels. Exports are also forecast up for Ukraine and India.

However, India’s exports will remain somewhat depressed from historic levels in light of strong local demand. Soybean meal consumption growth is also expected in China, other Asia and the Middle East where growing livestock and poultry consumption is driving demand for meal. In the United States, Brazil, and the European Union, demand growth is also augmented by growing production of livestock and poultry for export.

Soybean oil exports are forecast to rise slightly in 2017/18 with total volume projected to remain near historic highs. Competition with other oils will remain high, especially with the expected rebound in palm oil supplies following the last El Nino event. Exportable supplies, especially in Argentina, will be influenced by demand opportunities for biodiesel. The potential exists for declines in Argentina’s biodiesel exports which could add significantly to available soy oil for export.

Overall, total vegetable oil demand for the food market will continue to grow in line with the historic trends. Demand for soy oil wil be dependent upon its pricing and availability vis-à-vis other oils.

  • U.S. soybean exports are projected to rise 2.7 million tons to a record 58.5 million, meal exports are forecast higher at 11.2 million, up 272,000 tons, while oil exports are unchanged at slightly above 1 million tons.
  • Argentina soybean exports are projected to remain unchanged at 9.0 million tons, meal exports are forecast to grow 725,000 tons to 32.3 million, and oil is up 250,000 tons to 5.8 million.
  • Brazil soybean exports are projected up 1.6 million tons to 63.5 million, meal exports are forecast to climb 300,000 tons to 15.5 million, and oil exports are expected to rise slightly to 1.5 million tons.
  • China soybean imports are projected up 4 million tons to 93.0 million, while meal exports remain nearly stable at 1.5 million tons. Oil imports are forecast to decline 70,000 tons to 550,000.
  • EU soybean imports are projected to rise 400,000 tons to 15.0 million, with meal imports rising only 100,000 tons to 19.6 million.

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