Global oilseed production will be larger than estimated a month ago because of improving prospects for soybeans in Brazil and sunflowers in Russia and Ukraine, Oil World said.
Production of seven major oilseeds will be 490.9 million metric tons in the 2013-14 marketing year, 1.9 million tons more than previously estimated and 7 percent higher than the prior season, the Hamburg-based researcher said in an e-mailed report. The outlook was raised for world harvests of soybeans, sunflower seed and rapeseed, signaling ample supplies of the crops used in cooking oil, biofuel and livestock feed and potentially falling prices, according to the report.
"We are quite bearish on soybean prices and see considerable downward potential, with soybeans likely to fall below rapeseed and sunflower seed" on average through June, Oil World said. Global inventories of all three crops will rise to records by the end of the season, according to the report.
Soybean futures declined 11 percent in the past year on the Chicago Board of Trade, the global benchmark. Oil World expects spot prices for the oilseed delivered in Rotterdam to average $480 a ton from January through June, compared with $515 a ton for European sunflower seed and $500 a ton for rapeseed. Soybeans were $555 a ton from October to December, sunflower seed was $480 a ton and rapeseed $511 a ton, it said.
World production of soybeans will be 287.8 million tons, up from an estimate in December of 287.6 million tons, Oil World said. The researcher pegged Brazil’s crop at 89.5 million tons and reduced its outlook for Argentina to 54 million tons because of dry weather. Global inventories at the end of the 2013-14 season may be 79.2 million tons, up 26 percent from the past year. World production of rapeseed was pegged at 69.3 million tons, up 8.4 percent from a year earlier.
Global production of sunflower seed rose to 41.6 million tons in 2013-14, 1.4 million tons more than estimated in December and 17 percent higher than the previous season, Oil World said. Combined output in Ukraine and Russia, the biggest producers, may jump 27 percent from the prior year to 20.7 million tons, offsetting a decline in Argentina’s crop to 2.4 million tons, the smallest since 1987, it said.
"This is an unprecedented year for sunseed and products, with global production setting all-time highs and thus creating an extremely bearish scenario this season," Oil World said.
Global production of palm oil may total 58.34 million tons in the 2013-14 season that ends Sept. 30, Oil World said. That’s 2.5 million tons more than a year earlier, while a smaller growth rate than in the prior season. In Indonesia, the biggest producer, domestic demand is increasing for biofuel use. World exports may decline for the first time in 16 years, dropping 2.3 percent from the previous season to 43.2 million tons, according to the report.