In the December balance sheet, USDA experts again lowered estimates of oilseed production and stocks

In the December balance sheet for the 2022/23 financial year, USDA experts again reduced the forecast of world production of oilseeds by 1.4 million tons due to a decrease in the sunflower harvest in Ukraine and the Russian Federation, as well as canola in Canada, which will lead to a reduction in final stocks. Soybean production estimates for South America, meanwhile, have been left unchanged for now, although drought in Argentina is weighing on crop prospects and local agencies have already lowered their forecasts.

Compared to the November estimates, the new oil balance for the 2022/23 MR has undergone the following changes:

• The global production forecast was reduced by 1.4 million tons to 644.4 million tons (604.15 million tons in 2021/22 MR), in particular, sunflower – by 0.6 to 50.7 (57.32) million tons (for Ukraine by 0.1 to 10 (17.5) million tons and the Russian Federation - by 0.5 to 16.5 (15.6) million tons), rapeseed - by 0.5 to 84.3 (73.95) million tons , especially for Canada, which partially offsets the increase in soybean harvest estimates by 0.64 to 391.17 (355.61) million tons, primarily in India and Ukraine. For the main soybean-producing countries of Brazil, Argentina and Paraguay, harvest estimates were unchanged, although analysts expected a decrease in the forecast for Argentina from 49.5 to 48.7 million tons due to drought and delayed sowing, and the Argentine exchanges BAGE and RGE lowered their forecasts to 48 million tons
• The estimate of world processing was reduced by 0.92 million tons to 533.44 (511.59) million tons due to a reduction in palm processing.
• Despite the reduction in production, the forecast of global ending stocks was reduced by only 0.52 million tons to 121.42 (114.37) million tons, as against the background of reduced consumption in 2021/22 MY, ending stocks increased by 0.8 million tons.

It is expected that in Ukraine, against the backdrop of a reduction in production and the shutdown of most MEZs due to damage to the energy infrastructure, sunflower processing will decrease by 2 million tons to 9.6 million tons (11.35 million tons in 2021/22 MR and 13.85 million tons in 2020/ 21 MR), and its export will grow by 0.5 million tons to 2.45 (1.62) million tons, therefore the forecast of sunflower imports to the EU has been increased by 0.5 million tons to 2.85 million tons.

According to the data of the report, stock market quotations fell:

• January soybean futures in Chicago - up 1.8% to $536.5/t (+1.4% for the month),
• February rapeseed futures in Paris - by 3% to 554.75 €/t (-16% a month).

In Ukraine, sunflower prices increased by another 500 hryvnias/t to 16,000-17,000 hryvnias/t or $437-470/t with delivery to the factory, adding 7-11% for the month, while Russian sunflowers rose in price during this time by 14%.