Global stockpiles of 10 oilseeds will plunge 18 percent and production will reach a three-year low as dry weather cuts soybean output in South America, Oil World said.
Inventories of the oilseeds, including soybeans and rapeseed, will drop to 72.4 million metric tons from 88.7 million tons a year earlier, the Hamburg-based researcher said in a report today. Output will fall 2.9 percent to 439.6 million tons as use of the oilseeds for cooking, fuel and animal feed rises 3.1 percent, according to the report.
“Despite some demand rationing, there will still be a substantial decline in world oilseed stocks this season,” Oil World said. “The sharp decline of world stocks at the end of this season is raising the dependence on increased oilseed plantings and favorable weather in the Northern Hemisphere, as well as on rebounding oilseed production not only in the U.S., but also in other countries in the summer and autumn.”
Soybeans have gained 15 percent this year on the Chicago Board of Trade and rapeseed, or canola, has climbed 16 percent on ICE Futures Canada in Winnipeg. Palm oil has advanced 9.8 percent on the Malaysia Derivatives Exchange.
Dry weather in Brazil, expected by the U.S. Department of Agriculture to be the biggest global soybean exporter, has cut production of the oilseed, Oil World said. Growers in the U.S. may shun soybeans this year and instead sow corn as favorable weather promotes seeding of the grain, according to the report.
Competing With Corn
“Soybeans are fighting for acreage in the U.S.,” Oil World said. “Weather conditions have become favorable in the U.S. Midwest and Delta. At the moment there is concern that an early start of corn plantings in the U.S. could result in an insufficient expansion of the soybean area this spring.”
World production of rapeseed and canola, a lower-acid version of the oilseed, may decline 1.8 percent to 59.6 million tons on smaller harvests in the European Union, India and China, according to the report.
Sunflower-seed output may rise 16 percent from last season to a record 38.9 million tons, Oil World said. Cotton-seed production may gain 10 percent to a record 47.2 million tons as groundnut output falls by 200,000 tons, according to the report.
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