Oilseed

United States Department of Agriculture Foreign Agricultural Service Circular Series FOP 1 - 11 January 2011

Sharp Decline in Vegetable Oil Stocks Leads to Steeply Higher Prices

Commodity prices have been on an upward trend since June in response to improving economic conditions and a declining dollar. However, soybean oil has appreciated at more than twice the pace of meal and petroleum,reflecting both stronger world vegetable oil demand from China and shrinking stocks. Global vegetable oil stocks are forecast to drop 30 percent from their peak in 2008/09. As a share of consumption, stocks are expected to fall to levels unseen since the mid 1970s, reflecting an accelerated pace of vegetable oil disappearance in both food and fuel markets. Sharply higher petroleum prices were animportant factor in the 2008 surge in vegetable oil prices. However, this year's relatively modest price rise vis. a vis. vegetable oil is apparently indicative of stronger demand in the food sector and opens the door for the potential reallocation of vegetable oil supplies from fuel to food use.
Approved by the World Agricultural Outlook Board/USDA

Foreign Agricultural Service/USDA Office ofGlobal Analysis

January 2011

PRICES U.S. soybean export bids, FOB Gulf, in December averaged $513 per ton, the highest since August 2008. Strong demand for exports primarily from China and concerns over South American crops continue to support prices higher.

U.S. Gulf Soybean Export Bids
600
U.S. Gulf/FOB ($/Metric ton)

500

400

As of the week-ending December 30, U.S. soybeansales commitments 300 (outstanding sales plus accumulated exports) to China totaled 22.6 million tons, compared to 19.8 million a year ago. Total commitments to the world are 35.4 million tons compared to 32.2 million for the same period last year.
Jun-08 Jun-09 Aug-08 Aug-09 Feb-09 Apr-09 Dec-08 Oct-08

Jun-10

Aug-10

Apr-10

TRADE CHANGES IN 2010/11 • • • • U.S. soybean exports areunchanged at 43.3 million tons. Argentina’s soybean exports are down 0.5 million tons to 12.5 million on a reduced crop. Paraguay’s soybean exports are up 0.5 million tons to 5.1 million on a larger crop. Turkey’s soybean imports are cut 0.3 million tons to 1.1 million to reflect much smaller sales commitments from the United States, the top supplier.

Foreign Agricultural Service/USDA Office ofGlobal Analysis

Dec-09

January 2011

Dec-10

Feb-10

Oct-09

Oct-10

Table 01: Major Oilseeds: World Supply and Distribution (Commodity View)
Million Metric Tons
Dec 2010/11 Jan 2010/11 none none 5.96 43.55 12.79 34.14 58.32 255.53 30.10 440.38 none none 0.10 0.66 0.04 1.84 9.87 96.01 1.21 109.71 none none 0.15 0.72 0.02 2.22 9.67 98.00 1.31 112.08 none none 5.90 32.63 12.63 15.1257.55 225.21 27.08 376.12 none none 0.29 1.43 0.21 1.13 5.65 58.28 1.25 68.25

2006/07 Production Oilseed, Copra Oilseed, Cottonseed Oilseed, Palm Kernel Oilseed, Peanut Oilseed, Rapeseed Oilseed, Soybean Oilseed, Sunflowerseed Total Imports Oilseed, Oilseed, Oilseed, Oilseed, Oilseed, Oilseed, Oilseed, Total Exports Oilseed, Oilseed, Oilseed, Oilseed, Oilseed, Oilseed, Oilseed, Total CrushOilseed, Oilseed, Oilseed, Oilseed, Oilseed, Oilseed, Oilseed, Total Ending Stocks Oilseed, Copra Oilseed, Cottonseed Oilseed, Palm Kernel Oilseed, Peanut Oilseed, Rapeseed Oilseed, Soybean Oilseed, Sunflowerseed Total

2007/08

2008/09

2009/10

5.27 46.03 10.08 31.03 45.12 237.13 29.74 404.40

5.72 45.89 11.01 32.59 48.56 221.01 27.20 391.97

5.88 41.08 11.73 34.47 57.91 211.96 33.27396.31

5.88 39.22 11.93 32.98 60.62 260.09 30.39 441.11

5.96 43.53 12.79 34.05 58.35 257.78 30.18 442.63

Copra Cottonseed Palm Kernel Peanut Rapeseed Soybean Sunflowerseed

0.09 0.84 0.13 1.94 7.01 69.07 1.76 80.83

0.11 0.75 0.14 2.03 7.56 78.13 1.25 89.97

0.10 0.55 0.07 1.86 12.13 77.18 1.81 93.69

0.10 0.63 0.04 1.85 10.43 87.40 1.49 101.92

0.10 0.66 0.04 1.85 9.87 96.17 1.25...