OIL CROPS OUTLOOK                                               June 13, 1996
            Approved by the World Agricultural Outlook Board
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OIL CROPS OUTLOOK is published monthly by the Economic Research Service, U.S.
Department of Agriculture, Washington, DC 20005-4788.  OCS--0696.  
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WET SOILS STALL SPRING OILSEED PROGRESS
 
Like last year, soybean planting and emergence has been held up by excessively
wet and cool conditions, especially in the eastern Corn Belt.  Soybean
planting in Indiana and Ohio, the fourth and fifth largest producing States in
1995, is at least 3 weeks late.  Nationally, this year has not been delayed to
the same extent (farmers had planted 59 percent by June 9, compared with 55
percent in 1995), but seeding is behind the 5-year average of 74 percent.  On
the other hand, planting of corn in Iowa has been unhindered, and problems
with soybean cyst nematodes may induce more corn and fewer soybean acres than
first intended there.  While the window for corn planting has largely closed
in most areas, soybeans can still be feasibly planted through the end of June. 
This has helped new crop soybean futures prices to slide in recent weeks.  But
if drying does not soon occur, the prevented plantings could again send
soybean prices a good deal higher.
 
The assessed increase in soybean acres (stemming from the impediments for
planting corn) is 1.5 million, now projected at 64.0 million acres.  If
realized, this would be the largest U.S. soybean area since the 67.8 million
acres planted in 1984.  USDA's Acreage survey, to be released on June 28,
should indicate how farmers' intended planting has changed because of rising
prices, replantings after failure of winter wheat, and weather delays. 
Wetness has also hampered planting of sunflowers and flax in the Northern
Plains.  Just 80 percent of intended sunflower acreage in North Dakota was
planted by June 9, compared with the 88-percent average for this date.
 
Late planting is also expected to lessen yields somewhat, although the risk is
larger for corn than for soybeans.  The yield risk for soybeans would be
greater in States that are farther north, like Minnesota and Michigan, than in
Indiana, Ohio, or Kentucky.  While later planting tends to result in shorter
plants and fewer pods per plant, planting in narrower rows and increasing
plant populations can partially compensate for this effect.  At this early
phase, a modest reduction of 0.3 bushel per acre is anticipated from the trend
yield of 37 bushels.  This year would still have the third highest U.S.
average yield ever.  Given favorable prices, no major decrease in harvested
acreage is considered likely.  These factors would result in U.S. soybean
production of 2,310 million bushels, which pushes total 1996/97 supply up 40
million bushels from the May projection.
 
The change in projected 1996/97 demand from last month is not expected to
increase as much, however.  The domestic crush forecast was raised 5 million
bushels to 1,375 million, and exports were increased from 790 to 805 million
bushels.  This allows the ending stocks projection to increase to 210 million
bushels.  The stronger supply-to-use ratio prompts a slightly lower 1996/97
average price forecast, in the $5.70-$7.90 per bushel range.  The conflux of
favorable prices and large output, could push the 1996 soybean crop past the
1995 crop as the highest valued U.S. harvest.  The moderate increases in
1996/97 production of soybean oil and soybean meal are expected to end up
being exported, accompanied by a smaller increase in domestic soybean meal
disappearance.  Greater world production of grains, and less high-oil content
oilseeds, is expected to tighten the world supply of vegetable oils.  This
should significantly enhance the U.S. competitive position in world trade for
oilseeds and vegetable oil next season.
 
FURTHER SLOWING IN USE OF SOYBEANS AND PRODUCTS FOR 1995/96 SEEN
 
The U.S. crush forecast for 1995/96 was reduced to 1,355 million bushels this
month.  The April crush was down to 112.2 million bushels (compared with 119.4
million in April 1995).  Weekly crush during May showed no interruption in
this downward trend.  Weak product export demand continues to weigh down crush
activity.  The smaller crush estimate increases 1995/96 ending stocks of
soybeans 5 million bushels to 195 million.
 
Export demand for U.S. soybeans has softened since April as prices have risen. 
The price spread between the Gulf price and what Illinois processors paid
narrowed to 25 cents per bushel in April, down from over 40 cents earlier this
year.  The larger Brazilian crop projected this month should limit any rebound
in U.S. exports late this summer.
 
The cut in crush also slices the forecast for oil production 55 million pounds
to 15.1 billion.  As its recent strength continues, the 1995/96 oil price
forecast was slightly raised to 25.25 cents per pound.
 
Once again, projected U.S. exports of soybean oil have been reduced because of
sluggish sales and shipments.  U.S. soybean oil exports are expected down 100
million pounds (46,000 metric tons) this month to 1,350 million pounds
(612,000 tons).  Factors affecting the outlook for U.S. soybean oil trade
include India's projected reduction in soybean oil imports by 50,000 tons, and
the acceleration of China's shift to purchases of Asian palm oil and South
American soybean oil.  To illustrate the dramatic change of events from last
year, total March exports were just 68 million pounds, compared with 564
million pounds in March 1995.
 
Based on a strong year-to-date performance, projected domestic disappearance
of soybean oil was raised to 13,350 million pounds, up from 13,300 last month. 
However, the data on consumption of refined oils still shows a year-to-date
decline from last year of more than 3 percent.  This implies that end users of
oil have built up their supplies of oil to take advantage of lower prices from
earlier in the year.  Once this accumulation ends, soybean crush could suffer
more unless foreign demand returns.  Visible stocks of soybean oil have also
risen substantially from a year ago.  Oil stocks ending April were 1.7 billion
pounds, compared with 1.1 billion for April 1995.  Seasonal slowing in crush
and exports should bring carryout oil stocks down toward the 1.6-billion-pound
forecast.
 
Domestic disappearance of soybean meal was reduced 50,000 tons to 27.0 million
short tons, equalling the drop in expected production.  The reduction in the
1995/96 average meal price from $230.00 to $227.50 per ton reflects a cooling
of soybean meal prices in recent weeks.
 
WORLD OILSEED PRODUCTION UNCHANGED
 
World oilseed production for 1995/96 is estimated at 254.5 million metric
tons, nearly unchanged from last month's 254.6 million tons.  Increases in
cottonseed production were offset by declines in soybean and rapeseed
production.  China's oilseed numbers were updated based on a new 1995/96
report from the State Statistical Bureau (SSB).  Its cottonseed production was
raised 400,000 tons, while soybean and rapeseed output were lowered 500,000
and 60,000 tons, respectively.
 
Higher vegetable oil prices, combined with provincial and central government
policies, pushed farmers in China to raise rapeseed and peanut area to new
heights.  Production of high-oil content seeds was encouraged to reduce import
dependency and to compensate for soybean area lost to coarse grains.
 
The Government of India also reported new oilseed estimates for 1995/96. 
While rapeseed production was reduced 300,000 tons to 6.2 million tons,
smaller reductions occurred in sunflower and cottonseed.
 
This month, global soybean production remain nearly unchanged at 123.7 million
tons as increases in Brazil and Bolivia offset a large decline in China's
output.  Projected soybean production for China was dropped nearly 4 percent
to 13.5 million tons.  Pro-grain policies supported increased corn area at the
expense of soybeans, as well as productivity due to greater input use in
grains.  In South America, Brazil, and Bolivia soybeans were raised 200,000
and 140,000 tons, respectively.  Reported record yields in the State of Parana
are expected to slightly raise Brazilian yield and production.  Reports out of
Bolivia indicated that area planted rose to 400,000 hectares in 1995/96,
leading to a total production of 760,000 tons.
 
******************************************************************************
Information Contacts:
Mark Ash         Soybeans, Minor Oilseeds, Fats and Oils    (202) 219-0712
Scott Sanford    Peanuts, Cottonseed                        (202) 219-0835
Jaime Castaneda  World Oilseeds                             (202) 219-0826
******************************************************************************
 
The next Oil Crops Outlook is scheduled for 4:00 pm ET Monday, July 15.
 
Table 1--Soybeans:  U.S. supply and disappearance
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                     Supply                          Disappearance 
        --------------------------------  ------------------------------------
Year                                                     Seed,                
begin.     Beg.   Im-   Produc-  Total    Crush   Ex-    feed,    Total   End.
Sept. 1  stocks  ports   tion                    ports & resid.         stocks
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         -------------------------- Million bushels---------------------------
 
1994/95     209    6    2,517    2,731     1,405    838    153    2,396    335
1995/96 1/  335    5    2,152    2,492     1,355    825    117    2,297    195
1996/97 1/  195    5    2,310    2,510     1,375    805    120    2,295    210
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1/ Forecast.
Table 2--Soybean meal:  U.S. supply and disappearance
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                 Supply                           Disappearance 
        ----------------------------     ------------------------------------
Year 
begin.      Beg.    Produc-   Total      Domestic   Ex-     Total    End.
Oct. 1    stocks     tion                           ports           stocks
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         ---------------------------1,000 short tons--------------------------
 
1994/95     150     33,265    33,479       26,538   6,717   33,256    223
1995/96 1/  223     32,272    32,575       27,000   5,350   32,350    225
1996/97 1/  225     32,675    32,975       27,350   5,400   32,750    225
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1/ Forecast.
 
Table 3--Soybean oil:  U.S. supply and disappearance
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                 Supply                           Disappearance 
        ----------------------------     ------------------------------------
Year 
begin.       Beg.   Produc-   Total     Domestic  Ex-     Total     End.
Oct. 1     stocks    tion                         ports            stocks
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         -------------------------- Million pounds---------------------------
 
1994/95     1,103   15,613   16,733       12,916   2,680   15,596   1,137
1995/96 1/  1,137   15,100   16,300       13,350   1,350   14,700   1,600
1996/97 1/  1,600   15,435   17,075       13,500   1,750   15,250   1,825
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1/ Forecast.
 
Table 4--Oilseeds prices received by farmers, U.S.
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Marketing      Soy-  Cotton-  Sun- 
 year         beans   seed   flowers  Peanuts  Flaxseed
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              $/bu.   $/ton   $/cwt   Cents/lb  $/bu.
                                     
1990/91        5.74  121.00    10.80    34.70   5.27
1991/92        5.58   71.00     8.69    28.30   3.52
1992/93        5.56   97.50     9.74    30.00   4.12
1993/94        6.40  113.00    12.90    30.40   4.25
1994/95        5.48  101.00    10.70    28.90   4.63
1995/96        6.75  107.00    11.40    29.30   5.20
 
1994/95
September      5.47  101.00    10.70    30.60   4.55
October        5.30   96.00    10.50    28.60   4.52
November       5.36  107.00    10.60    25.90   4.52
December       5.41  103.00    10.60    25.80   4.72
January        5.47   95.00    10.50    25.50   4.76
February       5.40   70.00    10.80     NA     4.94
March          5.51    NA      10.40     NA     5.13
April          5.55    NA      10.70     NA     5.10
May            5.56    NA      10.60     NA     4.91
June           5.68    NA      10.70     NA     5.03
July           5.90    NA      11.50     NA     5.11
August         5.83  100.00    11.40    30.60   5.21
 
1995/96
September      5.98  100.00    11.00    29.70   5.11
October        6.15   99.00    11.00    28.60   5.11
November       6.40  114.00    10.80    29.50   5.17
December       6.76  116.00    10.60    28.60   5.03
January        6.78   98.00    11.00    29.80   5.27
February       7.01  120.00    11.50     NA     5.18
March          7.00    NA      11.90     NA     5.28
April          7.43    NA      12.50     NA     5.31
May1           7.67    NA      13.40     NA     6.01
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1 Preliminary.
 
Table 5--Vegetable oil prices
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                      Cotton-  Sun-       
Marketing    Soybean   seed   flower Peanut  Corn  
 year          oil2     oil3    oil4  oil5    oil6 
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                     Cents/lb.
                                                   
1990/91       21.00    24.10   23.67  45.50  27.50 
1991/92       19.10    22.83   21.63  27.30  25.82 
1992/93       21.40    30.07   25.37  27.40  20.90 
1993/94       27.00    30.30   31.08  43.20  26.38 
1994/95       27.51    29.23   28.10  44.30  26.47 
                                                   
1994/95                                            
October       27.06    27.81   28.90  46.00  24.73 
November      29.84    30.72   29.40  50.88  24.75 
December      30.61    31.83   30.63  53.80  24.75 
January       29.04    28.70   29.25  50.25  28.01 
February      28.15    29.95   27.66  41.83  27.26 
March         28.33    27.14   27.97  41.00  28.17 
April         26.30    27.61   26.89  41.25  27.30 
May           26.00    27.51   26.34  40.25  26.42 
June          26.78    30.04   27.30  39.00  26.61 
July          27.60    30.63   28.69  39.13  27.38 
August        26.56    30.26   27.47  41.50  26.35 
September     26.26    28.61   27.41  41.30  25.93 
 
1995/96
October       26.56    27.61   27.49  42.50  26.05
November      25.41    26.27   26.25  41.63  25.54
December      24.76    26.10   25.98  39.20  24.99
January       23.69    24.45   24.65  37.25  24.52
February      23.65    24.35   24.23  36.00  24.30
March         23.60    24.25   24.28  36.60  24.34
April         25.82    26.77   25.63  39.25  26.60
May1          26.50    28.46   26.38  42.80  27.98
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1 Preliminary 2 Decatur 3 PBSY Greenwood MS
4 Minneapolis 5 Southeast mills 6 Chicago
 
Table 6--Oilseed meal prices
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             Soy-   Cotton   Sun-           
Marketing    bean    seed   flower  Peanut  Linseed
 year        meal2   meal3   meal4   meal5   meal4
---------------------------------------------------
                        $/Short ton
1990/91     181.40  130.75   88.00  193.00  130.10
1991/92     189.20  140.50   76.80  154.50  125.25
1992/93     193.75  161.78   89.00  172.90  133.60
1993/94     192.86  164.30   94.00  194.91  139.55
1994/95     162.55  112.02   62.70  128.94   95.85
 
1994/95
October     168.50  134.40   75.00  151.25  122.50
November    161.00  120.50   69.50  147.50  110.00
December    156.90  114.20   52.50  127.00   95.60
January     156.40  106.75   50.00  105.00   82.40
February    151.30   97.50   46.88  107.50   85.25
March       156.90  100.30   52.50  119.00   90.00
April       161.90   98.10   62.50  125.00   94.40
May         159.10   92.75   60.90  123.75   85.00
June        160.40  108.75   62.38  134.00   85.00
July        170.45  116.90   73.75  138.75   92.50
August      166.70  116.50   83.75  136.25   95.00
September   180.99  137.60    NA    142.00  112.50
 
October     193.90  153.25   82.88  132.50  131.00
November    204.10  165.00   99.00  175.00  151.67
December    223.60  185.80  122.50  204.00  143.75
January     232.00  208.80  135.00  220.00  142.00
February    228.30  202.80  130.00  215.00  143.75
March       226.57  195.60  123.50  210.00  155.00
April       249.30  220.00  133.00  210.00  174.00
May1        244.30  194.75  137.00  212.00  177.00
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1 Preliminary 2 Hi-pro Decatur 3 41% Memphis 4 Minneapolis 5 50% SE mills
 
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