USDA slightly raised its forecast for global oilseed production, so prices remain under pressure from increased supply

In the April world oilseed balance for 2025/26 MY, FAS USDA experts increased the forecast for world oilseed production by another 0.67 million tons to 698.21 million tons (686.75 million tons in 2024/25 MY and 657.5 million tons in 2023/24 MY), in particular sunflower - by 0.62 million tons and cotton - by 0.34 million tons, which compensates for the decrease in the forecast for peanut production by 0.6 million tons.

The world soybean balance for the 2025/26 MY has undergone minor changes, in particular, the estimate of opening stocks has been increased by 1 million tons due to an increase in the estimate of the harvest in Brazil last season by 1 million tons.

The forecast for world soybean production in 2025/26 MY has been increased by 0.23 million tons to 427.41 million tons (428.15 million tons in 2024/25 MY), in particular for Paraguay - by 0.5 million tons to 12 (10.2) million tons, which compensates for the decrease in the harvest in Uruguay. For Brazil and Argentina, the forecasts are left unchanged at 180 (172.5) million tons and 48 (51.1) million tons, respectively.

The forecast for global soybean consumption has been increased by 1.7 million tons to 425.88 (413.46) million tons due to an increase in processing in the USA by 1 million tons to 74.1 (69.1 million tons in the previous season).

The soybean export forecast was left at 187.2 (184.2) million tons, while the estimate for the USA was reduced by 0.95 million tons to 41.9 (51.2) million tons, and increased for Brazil by 1 million tons to 115 (103.1) million tons and Paraguay by 0.5 million tons to 8.2 (6.4) million tons.

The forecast for world ending soybean stocks has been reduced by 0.5 million tonnes to 124.8 (124.8) million tonnes due to reduced stocks in Argentina, Brazil and Egypt.

May soybean futures in Chicago rose 0.3% to $428.2/t after the report was released (-1.9% since the March report) and remain at the same level as before the start of the war in Iran.

The forecast for global sunflower production has been increased by 0.6 million tons to 54.74 (53) million tons, in particular for the Russian Federation - to 17.5 (16.9) million tons.

In Ukraine, sunflower prices reached the highest level of the season at 31,000-31,500 UAH/t (with delivery to the factory at 50% oil content), which is 1,500 UAH/t higher than last month, although they remain under pressure from news of an increased harvest in Argentina and increased supplies of Argentine sunflower oil.

The forecast for global rapeseed production in 2025/26 MY is left at 95.5 (86) million tonnes, but the estimate for canola exports from Australia is increased from 5.35 to 5.55 million tonnes, and for rapeseed exports from Ukraine is reduced from 2.45 to 2.3 million tonnes amid increasing domestic processing volumes. The forecast for rapeseed imports to China is also reduced from 4.4 to 4.15 million tonnes, which will increase pressure on canola prices in Canada.

May canola futures rose 0.5% yesterday to CAD 708/t or $512/t (+1% month-on-month) following the rise in oil prices. Meanwhile, May rapeseed futures in Paris closed unchanged yesterday at €497/t or $581.3/t (-0.8% month-on-month in euro terms, but unchanged in dollar terms).

Oilseed markets remain under pressure from oil price fluctuations, which affect palm and soybean oil quotes, so farmers should accelerate sales at fairly high prices, as if the Strait of Hormuz is unblocked, oil prices will drop to $85-90/barrel, which will sharply lower vegetable oil prices.