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Monthly review of the oil market for July 2020
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Excerpts from the review:
 
PRICE MONITORING:

According to departmental price monitoring of the Ministry of agriculture of Russia from June 11 to July 9, 2020 the average sale price of sunflower seeds in Russia decreased to 20 287 RUB/t (-7,6%). Sunflower oil fell to 58 222 RUB/t (-0,5%). The price of soybeans was 25 157 RUB/t (+1,7%), sunflower meal — 15 171 RUB/t (+1,2%), rapeseed — 22 976 RUB/t (+0,2%).
 
According to the "Center Agrobaltika", in July, domestic prices for sunflower seeds and oil will get support because of the low level of their reserves. According to Rosstat, by June 1, the stocks of sunflower seed decreased by 40.8% to 343 thousand tons of other oil — by 26.4%, to 497 thousand tons.
 
Also, the positive price dynamics will contribute to the preservation of the high world prices for sunflower oil. On the other hand, downward pressure on prices will have reduced the competitiveness of Russian sunflower oil due to the increase of prices for sunflower oil. To offset the higher cost of sunflower is called a special authorization of the export of this crop outside the EAEU, introduced for the period from 1 July to 1 September.
 
PROCESSING.

According to Rosstat, the production of sunflower oil in may reached a historical high this month, amounting to 551 thousand tons (+20,8% compared to last year). Record was also, shipments of oil companies — more than 304 thousand tons (+17.6 percent). As a result, by June 1, the stocks of sunflower oil at the enterprises fell to a four-year low and amounted to 255 thousand tons (-36,4%). In General, during the September — may season-2019/20 produced more than 4,73 million tonnes of sunflower oil (+24,7% compared to the same period of the previous season).
 
FOREIGN TRADE.

With the start of the season on July 5, the largest volume of exports of oilseeds and their products from Russia fell on the sunflower oil over 2.95 million tonnes (+35,4% compared to last season). The leader in relative gains accumulated since the beginning of the export season remain sunflower seeds: their exports amounted to more than 1.22 million tons (3.7 times more than in the previous year).
 
The volume of soybean exports exceeded 949 thousand tons (+39.4 per cent). Export of flax seeds also increased significantly — almost to 494 thousand tons (+22.5 per cent). Foreign shipments of sunflower meal reached about 1.8 million t (+28,0%). Significantly increased shipments of soybean meal (+46,3%). Exports of rapeseed oil increased by 9.4%. Only the size of the accumulated exports of rape seeds is much lower than last year — more than 329 thousand tons (-34,0%).
 
Import of soybeans since the beginning of the season amounted to 1.65 million tonnes (-12,0% compared to last season), and the import of soybean meal increased to 162,5 thousand t (+30.3 per cent). Simultaneously, the import of palm oil increased to 898,5 thousand tonnes (+0.9%).
 
WORLD MARKET.

On 10 June the Ministry of agriculture of USA (USDA) has published the third prediction of the world balances on the 2020/21 year. Us agricultural Department is a little lowered the forecast of oil production compared to the June estimate. It is expected that world production of oil crops in 2020/21 year will grow by 4.7% mainly due to increased soybean production in the United States and South America. It is predicted that global oilseed production will reach a record $ 604,2 million tons because of record amount of acreage and increase yields. Against the publication of a report oilseed prices on world markets fell. According to estimates, world production of soybeans in 2020/21 year will increase to USD 362.5 million tonnes, which is 7.5% (25.4 million tons) more than in the 2019/20 year. It is expected that in aggregate the share of Brazil and the United States will account for more than 67% gross yield and over 82% of the increase in soybean production.
 
World sunflower seed production in 2020/21 year is expected at a record level at 56.8 million tons (+3.2% to 1.74 million tonnes). A large part of the increase in yield will have on Argentina — 0.7 million tons (4.0 million tons), Ukraine — +0.5 million tons (to 17.0 million tonnes), Russia — +0.2 mn t (up 15.5 million tons). In Turkey, the projected decrease in sunflower yield to 1.68 million tonnes (-0,07 MT). Global rapeseed production in 2020/21 year will be estimated at 69.8 million tonnes (+2.4%, or 1.6 million tonnes). Forecast rapeseed production in Canada decreased by 0.9 million tonnes compared with the June rating up to 19.0 million tonnes (last season).
 
TRENDS AND PROJECTIONS.

A marked slowdown of the world economy (the IMF expects that in 2020, the global recession will be 4.9%), according to the "Center Agrobaltika", will continue to negatively affect prices of oilseeds in the coming months.
 
In the coming weeks, the main external factor that will have a negative impact on world trade, will remain pandemic COVID-19. Its impact on world trade of oilseeds will continue at least until the moment when the incidence starts to decline; thereafter, it is possible to expect restoration of normal trade regime.
 
Significant impact on market conditions can have an adverse agrometeorological conditions and a possible new round of trade war between China and the United States.
 
Uncertainty in 2020 remain the global oil prices that affect the cost of vegetable oils (a significant portion is used for biodiesel production).
 

To see the full text of the review at: specagro.ru
  
Subscribe to the weekly and monthly industry surveys agricultural markets (meat, milk, cereals, oilseeds, sugar) by sending a request to press@spcu.ru.
 

Help:

The fgbi "Center Agrobaltika" provides the latest comprehensive information on the state of agricultural markets, generates forecasts of production figures and prices, conducts analysis of the import and export of agricultural products, provides expert assessment of the market APK. Through an extensive branch network (60 branches) institution forms a single interconnected system of information support of agriculture. Among the main consumers of information – the Ministry of agriculture of the Russian Federation, regional government of agriculture, agricultural producers, other participants in agricultural markets.



Translated by service "Yandex.Translation"
Источники: Agro2b
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