USDA lowers 2024/25 oilseeds forecast due to lower sunflower and canola yields

In the September WASDE supply and demand report from the USDA, the forecast for the world production of oilseeds in 2024/25 MY was reduced by 3.12 to 687.42 million tons (657.82 million tons in 2023/24 MY), in particular, sunflower – by 2 million tons and rapeseed - by 1.27 million tons, which is partially compensated by an increase in the soybean harvest by 0.47 million tons.

 

Compared to the August estimates, the new balance for soybeans for FY 2024/25 is almost unchanged:

 

• The estimate of initial reserves was left at 112.25 million tons (100.66 million tons in FY 2023/24).
• The global production forecast was increased by 0.47 to 429.2 million tons (394.75 million tons in FY 2023/24 and 378.4 million tons in FY 2022/23), in particular for Canada – by 0.3 to 7.2 million tons and Paraguay - by 0.5 to 11.2 million tons. For the USA, the estimate was left at the level of 124.9 (113.34) million tons, although analysts expected a decrease in the forecast.
• The estimate of world consumption was increased by 0.14 to 402.98 (383.29) million tons.
• The estimate of world exports was increased by 0.41 to 181.63 (177.95) million tons, in particular for Paraguay - by 0.5 to 7.3 million tons. For the USA, the forecast was left at 50.3 million tons, for Brazil - 105 million tons.
• The forecast of world ending stocks was increased by 0.28 to 134.58 million tons (112.25 million tons, 99.7 million tons and 100.3 million tons).

 

For FY 2023/24, USDA experts left the soybean harvest forecast in Brazil at 153 million tons, and exports at 105 million tons, although the local agency Conab estimates them at 147.38 and 92.4 million tons, respectively, so in the October report, estimates may be adjusted.

 

According to the report, November soybean futures on the Chicago Stock Exchange rose by 1% to $371.4/t (+2.5% compared to the data after the August report).

 

The forecast of global rapeseed production for 2024/25 MR was reduced by 1.27 to 87.56 (89.35) million tons, in particular for the EU – by 1.25 to 17.65 (19.98) million tons. At the same time, it was left unchanged forecasts for Ukraine at the level of 3.7 million tons (although harvesting has been completed and the harvest was 3.4 million tons), Canada - at the level of 20 million tons (while StatCan estimates the harvest at 19.5 million tons, and local analysts - at 19 million tons), Australia - 5.5 million tons and the Russian Federation - 5.1 million tons. The import forecast for the EU has been increased by 0.3 to 6.6 million tons, which will significantly exceed the 5.5 million tons of the 2023/24 FY season.

 

The forecast for world rapeseed exports was reduced by 0.2 to 17.28 million tons, in particular for Canada - by 0.45 to 7 million tons, while for Australia the estimate was increased by 0.25 to 4.75 million tons. For Ukraine, the export forecast remained at the level of 3.3 million tons, while processing was estimated at 400 thousand tons, which raises doubts among analysts.

 

August rape futures on the Paris MATIF rose by 0.1% to €466.25/t or $516.8/t (+1.3% for the month).

 

The forecast of world production of sunflower for 2024/25 MY was reduced by 2 to 50.5 (55.93) million tons, in particular for Ukraine – by 1 to 12.5 (15.5) million tons, the EU – by 0.65 to 9 .5 (10) million tons, Kazakhstan – by 0.15 to 1.4 million tons, and Moldova – by 0.15 to 0.7 million tons. For the Russian Federation, the estimate was left at the level of 16 (17.1) million tons. Forecast of world sunflower processing was reduced by 1.8 to 46.9 million tons, in particular for Ukraine – by 1 to 12.15 million tons and the EU – by 0.45 to 8.6 million tons. The estimate of final stocks was reduced by 0.07 to 2.38 million tons.

 

Further adjustments to the rapeseed harvest for Ukraine and Canada and sunflower in the Russian Federation and the results of soybean sowing in Brazil (where dry hot weather continues) will support the prices of oil crops in the near future.