The world wide oilseed production report prepared by the USDA came out late last week. It’s a long read (39 pages), so here are the 4 key takeaways we thought you should know. The entire report is available here.
1. The global interconnected production marketplace matters, but if you’re at all like us it’s hard to remember which countries matter for which crops. Here are the countries that are impacting oilseed production/prices.
Soybeans: United States, Brazil, South Africa
Peanuts: India, Senegal
Rapeseed: EU, Russia
2. Exports are strong to China as shifting consumer behavior continues with the reduction in usage of palm oil. As a result, the Chinese government is changing its subsidy structure which has been largely focused around corn and wheat to encourage greater soybean acres. At this time, the USDA feels like that production will be largely to satisfy the feed quality soybean needs.
3. Weather forecasts for Brazil and Argentina matter to pricing as they move into their growing season. Included is a map of Brazil below to show the main growing regions so as you look at forecasts you can focus in - you will most often hear about Parana in agricultural outlook services and if you use AccuWeather it can provide a nice chart of daily temperature for the month.
Expected soybean area harvested for 2017/18:
Brazil - 34,900
Argentina - 19,100
United States -36,208
4. Soybean export prices are coming up from where they were following South American harvest. This pushed the average US price up $0.10 to $9.30 per bushel.
If you have questions, or would like more details please leave us a comment below.
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