MarketsFarm — The U.S. Department of Agriculture (USDA) released its monthly oil crops outlook on Tuesday featuring reductions in global rapeseed and sunflower production and U.S. soybeans.
USDA estimated global rapeseed production at 68.6 million tonnes, a decline of one million, with the lion’s share of the losses in Canada.
Canadian production for 2019-20 was placed at 19.5 million tonnes, according to USDA. The department cited dry conditions in Alberta as the primary reason, with the province’s rainfall having been 30 per cent below average in 2019.
As well, USDA stated recent snowfall on the Prairies could result in farmers abandoning some of their canola due to the high cost of drying and the likelihood of price discounts because of lower quality.
Canadian ending stocks were dropped from 2018-19’s record of 4.1 million tonnes to 3.6 million for the current crop year.
USDA cut rapeseed production in the European Union by 350,000 tonnes to be 17.15 million, because of dry conditions in France, Germany and Poland.
Also, Australia’s canola production was dropped by 100,000 tonnes, again due to dry conditions. Australia is now expected to produce 2.2 million tonnes.
In contrast, the U.S. is set to reap a record 1.68 million tonnes of canola, while still importing more than 680,000 tonnes.
USDA lowered its forecast for global sunflower production to 51.4 million tonnes, for a cut of 1.2 million.
Ukraine was expected to produce 14.5 million tonnes, a drop of one million from September’s outlook, but still a record crop for the country.
With dry conditions in France and Spain, the EU is now projected to harvest 9.8 million tonnes of sunflowers. Although that estimate is down 100,000 tonnes, it’s larger than last year’s crop of 9.5 million.
Reflecting the data in USDA’s October supply and demand (WASDE) report, the oil crops outlook estimated U.S. soybean yields to be 46.9 bushels per acre, a drop of one from the previous month. With a projected 75.6 million acres of soybeans to be harvested in 2019, that translates to production at 3.55 billion bushels.
That’s revised downward from the 3.63 billion bushels in September. The outlook stated September’s weather was helpful in giving time for late-planted crops a chance to mature, but dry spells in the southeast states led to the overall reduction.
USDA also noted recent wet conditions in the northern U.S. Plains have caused delays in the ongoing harvest.
The estimate for exports was steady at 1.76 billion bushels, which is an 11-year low.
The domestic crush was pegged at 2.12 billion, which was a small increase of five million bushels.
All of this has meant another significant decrease in soybean ending stocks, to an estimated 460 million bushels in the October report That’s down from 640 million in the September outlook and sharply lower from the 913 million bushels for the 2018-19 crop year.
— Glen Hallick reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.