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Oilseed: World Market Report - Market Forces Curb US Soybean Oil Exports

09 December 2011

USDA Foreign Agricultural Service

The United States is selling soybean oil to foreign markets at the slowest pace since 2005/06. Consequently, exports for the full year are forecast to plunge to less than half the level reached in the previous two years.

This slower sales pace reflects a growing abundance of competing vegetable oils in major exporting countries accompanied by tight US supplies and a return to higher levels of domestic consumption. The current market dynamics are in sharp contrast to the previous two years when tight world vegetable oil supplies and strong demand led to high prices and a surge in US exports.

OVERVIEW

Global soybean trade is down slightly this month as US exports are reduced. Production is raised as larger crops in Canada and India more than offset a reduction in China. World demand for soybean meal is lowered, while oil is higher. US season average price is lowered, but remains a record.

SOYBEAN PRICES

US export bids, FOB Gulf, in November averaged $452 per ton, down nearly $20 from last month, influenced by concerns over the global economic slowdown and the slow sales pace.

As of the week-ending December 1, US soybean commitments (outstanding sales plus accumulated exports) to China totaled 15.8 million tons, compared to 21.2 million a year ago. Total commitments to the world are 22.1 million tons compared to 33.4 million for the same period last year.

2011/12 TRADE OUTLOOK

  • US soybean exports are cut 680,000 tons to 35.4 million on slow sales during the peak shipping season.
  • Brazil’s soybean exports are raised 500,000 tons to 38.5 million supported by larger exportable supplies and competitiveness.
  • Canada’s soybean exports are raised 300,000 tons to 2.9 million on near-record export supplies. Rapeseed exports are also raised 600,000 tons to 7.5 million supported by a record crop.
  • EU-27 soybean imports are cut 300,000 tons to 12.3 million on reduced demand for crush. Imports of soybean meal are also cut 400,000 tons to 22.6 million due to abundant supplies of other feed grains.
  • Indonesia’s soybean imports are up 220,000 tons to 2.0 million as the previous year’s imports were much stronger-than-expected.
  • China’s rapeseed imports are raised 300,000 tons to 1.2 million to offset reduced production.
  • Ukraine’s sunflowerseed meal exports are raised 300,000 tons to 3.0 million, and oil exports up 250,000 tons to 2.9 million supported by stronger crush.

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