In a new report the USDA again lowered its forecast for vegetable oil production

In the February balance sheet for oilseeds, USDA experts, as in the January report, again lowered the forecast for global vegetable oil production in 2021/22 MG, reducing the production estimate for soybean oil and increasing it for rapeseed. Analysts had expected a more significant decline in the forecast for soybean oil production amid a deterioration in estimates of the soybean harvest in South America.

Compared to the January report, the new oilseed balance sheet for my 2021/22 made the following changes::

• Forecast world-class production vegetable oils were reduced by 0.7 million tons to 213.2 million tons, which is 6.79 million tons higher than in my 2020/21. The forecast for soybean oil production was lowered by 1 million tons to 60.28 million tons (59.17 million tons in 2020/21 MG) due to a reduction in the soybean crop in South America, while the forecast for rapeseed oil production was increased by 0.43 million tons to 28.3 million tons (29.16 million tons).
• Rating global consumption oil was reduced by 0.39 million tons (recall that in October it was reduced by 0.47 million tons, in November – by 0.46 million tons, in December – by 0.64 million tons, in January – by 0.48 million tons) to 210.28 million tons, which is 5.09 million tons higher than in 2020/21 MG. The reason will be reduced consumption of biodiesel and high prices for vegetable oils.
• Forecast global imports reduced by 1.8 million tons to 83.98 million tons (81.89 million tons in 2020/21 MG). Due to restrictions on exports from Indonesia and too high a price, the estimate of palm oil imports was reduced by 1.57 million tons to 48.09 million tons (47.56 million tons in 2020/21 MG), in particular for India by 0.7 million tons to 7.75 million tons, the EU – by 0.45 million tons to 6.15 million tons, China – by 0.4 million tons to 6.7 million tons.
• Rating global final reserves increased by 0.28 million tons to 24.01 million tons (25.15 m tons in 2020/21 MG) due to an increase in palm oil reserves in Indonesia due to export restrictions. Palm and soybean oil stocks in China and India are expected to decline, which may strengthen demand for sunflower oil, whose prices are still lower.

April palm oil futures on the Malaysian stock exchange remain at a high level of 5535 ringgit/t or 1 1322/t against the background of a reduction in oil reserves in the country at the end of January by 3.85% to the lowest level since July 2021 - 1.55 million tons, and a reduction in production in January by 13.5% to the lowest since February 2021-1.25 million tons. however, palm oil exports in January decreased by 18.7% to 1.16 million tons against the background of a sharp increase in prices and falling demand from India.

March soybean oil futures on the Chicago Stock Exchange rose slightly on the report data, recouping the previous drop, and in general for the month added 9% of the price on forecasts of a reduction in the soybean crop in South America, and are now trading at almost the highest level in the season at 1 1,416/ton.

Prices for Black Sea sunflower oil remain at the level of F 1390-1400/ton FOB, and are significantly lower than prices for palm and especially soybean oil. Traders expect increased demand from India and China in the near future amid a further reduction in forecasts for the soybean harvest in South America, which will contribute to an increase in soybean oil prices.