In the latest USDA WASDE report for September, global oilseed production for the 2024/25 marketing year (MY) is forecast to drop by 3.12 million tons to 687.42 million tons. While sunflower and rapeseed production is expected to see significant declines, a slight increase in soybean harvest estimates will help offset some of the losses. What’s driving these changes, and how will it impact global markets?

Sunflower and Rapeseed Production Face Major Reductions

According to the USDA report, sunflower production is projected to fall by 2 million tons, while rapeseed production will drop by 1.27 million tons. These declines are primarily driven by lower yields in major producing regions such as Ukraine and the European Union:

• Ukraine: Sunflower production is estimated at 12.5 million tons, down 1 million tons from the previous season.
• European Union: Sunflower production is expected to decrease by 0.65 million tons to 9.5 million tons, while rapeseed production will fall by 1.25 million tons to 17.65 million tons.
• Kazakhstan: Sunflower production is forecasted to decrease by 0.15 million tons to 1.4 million tons.
• Moldova: The country is expected to produce 0.7 million tons of sunflower, down by 0.15 million tons from the previous year.

Soybean Production Holds Steady Despite Global Volatility

The outlook for soybean production remains relatively stable, with only minor adjustments compared to previous estimates. Global production is forecasted to increase by 0.47 million tons to 429.2 million tons. Key updates include:

• Canada: Soybean production is expected to rise by 0.3 million tons to 7.2 million tons.
• Paraguay: Forecasted to produce 11.2 million tons, an increase of 0.5 million tons from earlier estimates.
• United States: The estimate remains unchanged at 124.9 million tons, despite expectations for a decrease.

Global Exports and Stocks Show Modest Increases

While production forecasts are mixed, global consumption and export estimates for soybeans continue to rise. The USDA report increased the global export estimate for soybeans by 0.41 million tons to 181.63 million tons, with Paraguay leading the charge with an additional 0.5 million tons in exports. Global ending stocks are also expected to rise to 134.58 million tons, up by 0.28 million tons from the previous forecast.

For rapeseed, global export forecasts have been reduced by 0.2 million tons to 17.28 million tons, with Canada seeing the biggest cut, dropping by 0.45 million tons to 7 million tons. In contrast, Australia’s rapeseed export forecast has been increased by 0.25 million tons to 4.75 million tons.

Futures React to the USDA Report

Following the release of the USDA report, soybean futures on the Chicago Stock Exchange saw a 1% increase, closing at $371.4/t. In Europe, rapeseed futures on the Paris MATIF rose slightly by 0.1% to €466.25/t ($516.8/t), marking a 1.3% increase for the month. Meanwhile, November canola futures on the Winnipeg exchange dropped by 3.2% to CAD 570/t ($420/t) following a sharp decline in oil prices.

Market Outlook: What’s Next for Global Oilseeds?

As global rapeseed and sunflower production estimates continue to be revised downward, analysts are keeping a close eye on developments in Ukraine, Canada, and the Russian Federation. Meanwhile, soybean sowing in Brazil remains under threat from dry, hot weather, which could further impact global production.

The latest USDA WASDE report highlights significant disruptions in global oilseed production, with sunflower and rapeseed facing the most substantial cuts. These changes are likely to drive volatility in the market, particularly as global stocks tighten and demand for oilseeds remains strong. Moving forward, the market will need to adapt to these shifting dynamics, with prices likely to see continued support from lower production forecasts. The upcoming harvests in Brazil and potential adjustments to Ukrainian and Canadian forecasts will be crucial in shaping the oilseed market in the coming months.

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