OIL CROPS OUTLOOK                                              April 14, 1997
            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-0497.  
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BATTERED BY HIGH PRICES, U.S. SOYBEAN DISAPPEARANCE STARTS SLOWDOWN

On March 31, the Grain Stocks data indicated that total soybean use in the
second quarter exceeded the record offtake established in the first quarter. 
Second quarter disappearance was 19 percent higher than a year earlier. 
Soybean crush set a February record at 125.2 million bushels, and exports were
the second highest ever for the month.  Soybean stocks as of March 1 were
1,056 million bushels, down 767 million and 135 million from December 1 and
March 1, 1996, respectively.  Based on year to date use data and the stocks
report, the 1996/97 expected residual was raised to 54 million bushels this
month.  Expected use of soybeans for seed, based on large intended plantings
this spring, was raised to 77 million bushels.

The rapid demand cannot be sustained, however, as U.S. carryover stocks cannot
be reduced too much this fall without disrupting the market.  To insure a
minimally acceptable level of stocks, recent soybean prices already appear to
be rationing domestic crush and exports and may also attract imports.  Central
Illinois cash prices have risen above $8.60 per bushel in early April.  The
season average farm price was forecast higher at $7.10-$7.50 per bushel this
month, up from the March report's $6.90-$7.30.  In the last half of March,
lower weekly crush and export data indicate that the rationing is underway. 
Weakening profit margins have forced several crushing plants to halt or slow
operations.  Even so, U.S. 1996/97 ending stocks of soybeans are forecast down
15 million bushels this month to a very tight 125 million.

In coming months, soybean exports should show the greatest percentage decline
as most importers turn to South American suppliers.  Recent U.S. soybean
shipments have been narrowed to just four major destinations:  Japan, Taiwan,
Netherlands, and Mexico.  The upheaval in Taiwan's swine industry is
anticipated to curtail U.S. soybean exports to Taiwan for the remainder of the
crop year, restraining growth in 1996/97 exports to 895 million bushels.  This
forecast implies about a 56-percent reduction in March-August exports from
September-February.  By comparison, 1995/96 exports dropped 34 percent over
the same period.  Favorable weather has advanced Brazil's soybean harvest well
ahead of average and export registrations already exceed total 1995/96
shipments.  Despite some interruptions, loadings at the port of Paranagua were
at a record high by the end of March.

The monthly average price for soybean meal rose to $280 per short ton in March
and had surpassed $300 in early April.  USDA forecasts a higher marketing year
average price of $240-$270 per ton, up from the March forecast of $235-$250.

The March 1 hog and pig inventory was down 1 percent from a year earlier.  The
December-February pig crop, which will reach maturity by this fall, was
virtually unchanged from last year.  March through May farrowing intentions
are also unchanged, delaying an expected rebound in production.  However,
there are signs of a modest expansion, with a solid increase in the breeding
herd from the December report.  June through August farrowing intentions are
up 2 percent from 1996.  But this will not represent a potential increase in
soybean meal consumption until the 1997/98 marketing year.

The outbreak in foot-and-mouth disease in Taiwan's hog sector will force at
least a 2-year ban on its pork exports (because the meat can carry the virus). 
Japan, the world's largest pork importer and Taiwan's major trading partner,
will have to turn to the United States as the principal source to fill the
gap.  U.S. hog prices have rallied and domestic production will accelerate in
response.  Consequently, domestic soybean meal consumption will benefit, but
at the expense of U.S. soybean exports to Taiwan.  Taiwan's imports of
soybeans for crush are projected down 200,000 metric tons to 2.4 million tons,
reducing soybean meal production and consumption to 1.6 million tons.

The outlook for 1996/97 U.S. soybean oil exports appears slightly dimmer this
month, dropping to 1,800 million pounds from 1,850 last month.  Taiwan's
imports of soybean oil will increase to compensate for the domestic supply
deficit.  But, a more optimistic situation for domestic Chinese oil production
may curb further import requirements for U.S. soybean oil.  On the other hand,
1996/97 domestic disappearance of soybean oil has been relatively robust, and
is projected up to 13,850 million pounds.  The oil price forecast reverts to
USDA's February forecast of 22.75-24.25 cents per pound.

U.S. export shipments of sunflowerseed oil have been very disappointing to
date.  Through January, 237 million pounds had been exported, compared with
328 million a year earlier.  This has been reflected by lackluster prices for
sunflower oil.  With time running out on the usual marketing season, the
1996/97 oil export forecast was reduced to 520 million pounds, from 628
million last year.  The sluggish oil demand is backing up onto the seed
crushing pace.  Projected crushings were dropped to 1,640 million pounds, 378
million pounds below last season.  Seed exports are also lagging, helping
sunflowerseed stocks to accumulate.  Year ending stocks of sunflowerseed are
forecast at 590 million pounds, the largest since 1982/83.  Despite ample seed
supplies, expected oil production drops to 656 million pounds, the lowest
level in 3 years.

DROUGHT LIMITS ARGENTINE SOYBEAN YIELDS

In Argentina, the soybean harvest has just begun.  The status of first crop
soybeans, particularly in the province of Buenos Aires, is quite good. 
Despite recent scattered rains, double cropped soybeans deteriorated in March
because of a continuing drought in the provinces of Santa Fe and Cordoba. 
USDA reduced its forecast of Argentine soybean production from 13.5 million
tons to 13.25 million.  This would still be a record Argentine harvest, but
that is mainly due to a large expected area.  National average yields are
anticipated to remain below trend because of the dryness and a larger double
cropped area, which typically yield less than single crop soybeans.  The dip
in projected 1996/97 production resulted in lower forecasts for exports (1.9
million tons), crush (10.8 million), and stocks (4.8 million).

Imports of soybean meal by China this year was projected up again this month,
to 2.3 million tons.  And, based on a revision in Chinese data, 1996/97 China
cottonseed production was raised 700,000 tons this month to 7.56 million.  The
larger output is expected to raise Chinese cottonseed crush to 6.2 million
tons.  Although less than 1995/96, this would boost China's cottonseed oil
production this season to 867,000 tons.

ATTRACTIVE PRICES TO SWELL 1997 SOYBEAN PLANTING TO 15-YEAR HIGH

Responding to comparatively strong soybean prices (versus corn, sorghum,
wheat, and cotton), farmers in nearly every State are considering much higher
soybean acreage in 1997.  According to the March 31 Prospective Plantings
report, U.S. farmers intend to plant 68.8 million acres of soybeans.  If
realized, this would be the largest area planted to soybeans since 1982. 
Prior to the intentions report, the soybean to corn price ratio was a healthy
2.75, while the ratio of futures prices for November soybeans and December
corn was about 2.45.  In previous years, these ratios would not portend such a
large shift between the competing crops, but the elimination of deficiency
payments has reduced the ratio where corn and soybean production have
equivalent cash returns.  November 1997 soybean futures subsequently tumbled
on what could (weather permitting) be an unusually large crop.

Last year, many eastern Corn Belt farmers planted soybeans because wetness
delayed them from planting corn.  This spring, rotational considerations
generally supports more corn for this region.  Planting successive soybean
crops tends to worsen disease problems.  Soybean acreage in Indiana and Ohio,
which were the only major producing States to indicate a decline from 1996,
was down 200,000 acres for each State.

With a few exceptions, corn and cotton generally held onto acreage against
soybeans.  Much of this year's additional soybean acreage appears to be coming
at the expense of wheat, sorghum, and reduced fallow.  A modest net increase
in Conservation Reserve Program acres returning to production may also
contribute to higher soybean area this year.  A late grain and soybean harvest
in 1996, along with much lower wheat prices, prevented as much winter wheat
area from being planted.  And, if the current wet conditions don't improve in
the East Corn Belt and wheat diseases develop, some farmers may find it
worthwhile to replant with soybeans this spring.

Record soybean planting is expected in 1997 for Iowa, Minnesota, Nebraska,
South Dakota, Kansas, North Dakota, and Wisconsin.  Many farms in these
traditional feed grain States are probably adopting a 50-50 corn-soybean
rotation.  With the elimination of government payments tied to crop acreage
bases, farmers will quickly exploit the yield advantages of a 50-50 rotation
versus continuous corn.  The westward expansion of hog production into the
Great Plains is also increasing local demand and production of soybeans.

In the South, the early soil warmup this spring favors more corn planting,
although this will probably crowd out more cotton than soybeans.  Early
planting tends to improve corn yields.  But continued wet conditions in the
Delta region may induce farmers to plant even more soybeans instead of cotton. 
Soybeans can be planted later than cotton, which must usually be seeded by the
end of April.  Some southern farmers may try to capture very high prices this
summer by planting early maturing varieties for harvest in August.  And where
winter wheat is produced, double cropping of soybeans will be quite attractive
this year.

HIGHER SUNFLOWER, FLAXSEED ACREAGE ANTICIPATED

Last year's high grain prices have plummeted while oilseed prices have
remained stable.  And near record snow depths last winter have greatly
increased the probability of spring flooding and late planting in the Northern
Plains.  These factors are expected to shift acreage from wheat to sunflowers,
which have a shorter growing season than wheat.  Intended sunflower area in
1997 is 3.1 million acres, up 20 percent from 1996.  A record 712,000 acres of
confectionery sunflowerseed is anticipated.

U.S. flaxseed area is also expected to rebound.  Farmers intend to plant
197,000 acres, with area in North Dakota (the leading producer) more than
doubling from 1996.

******************************************************************************
Information Contacts:

Mark Ash         Soybeans, Minor Oilseeds, Fats and Oils     (202) 219-0712
                                                           mash@econ.ag.gov
Scott Sanford    Peanuts, Cottonseed                         (202) 219-0835
                                                       ssanford@econ.ag.gov
******************************************************************************
The next Oil Crops Outlook is scheduled for 4:00 pm ET Tuesday, May 13.

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  residual        stocks
------------------------------------------------------------------------------
         -------------------------- Million bushels---------------------------

1994/95     209    5    2,517    2,731     1,405    838    153    2,396    335
1995/96     335    4    2,177    2,516     1,370    851    112    2,333    183
1996/97 1/  183    5    2,382    2,571     1,420    895    131    2,446    125
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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      1/                   ports           stocks
------------------------------------------------------------------------------

         ---------------------------1,000 short tons--------------------------

1994/95     150     33,265    33,479       26,538   6,717   33,256    223
1995/96     223     32,527    32,825       26,611   6,002   32,613    212
1996/97 3/  212     33,538    33,850       27,000   6,650   33,650    200
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1/ Includes imports.  2/ Estimated.  3/ 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      1/                 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     1,137   15,240   16,472       13,465     992   14,457   2,015
1996/97 3/  2,015   15,460   17,550       13,850   1,800   15,650   1,900
------------------------------------------------------------------------------
1/ Includes imports.  2/ Estimated.  3/ Forecast.


Table 4--Oilseeds prices received by farmers, U.S.
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Marketing      Soy-  Cotton-  Sun- 
 year         beans   seed   flowers  Peanuts  Flaxseed
--------------------------------------------------------
              $/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
1995/961       6.77  106.00    11.35    29.30   5.25

1995/96
September      5.98  101.00    11.00    29.70   5.11
October        6.16   99.00    11.00    28.60   5.11
November       6.40  114.00    10.80    29.50   5.17
December       6.76  116.00    10.70    28.60   5.03
January        6.78  106.00    11.10    29.80   5.27
February       7.00  117.00    11.50     NA     5.18
March          7.00    NA      12.10     NA     5.28
April          7.43    NA      12.70     NA     5.31
May            7.69    NA      13.50     NA     6.03
June           7.41    NA      14.30     NA     5.88
July           7.62    NA      13.70     NA     6.19
August         7.82  118.00    12.70     NA     6.15

1996/97
September      7.79  129.00    12.00    27.70   5.89
October        6.95  123.00    11.70    25.80   6.49
November       6.90  117.00    11.90    25.00   6.50
December       6.91  136.00    11.60    25.60   6.79
January        7.13  132.00    11.80    24.30   6.42
February       7.38  128.00    12.20     NA     6.30
March1         7.95   NA       11.50     NA     6.28
--------------------------------------------------------
1/ Preliminary.


Table 5--Vegetable oil prices
---------------------------------------------------
                      Cotton-  Sun-       
Marketing    Soybean   seed   flower Peanut  Corn  
 year          oil2     oil3    oil4  oil5    oil6 
---------------------------------------------------
                     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 
1995/96       24.70    26.53   25.40  40.00  25.55 
                                                   
1995/96
October       26.57    27.61   27.49  42.50  26.05
November      25.42    26.27   26.25  41.63  25.54
December      24.76    26.10   25.98  39.20  24.99
January       23.52    24.45   24.65  37.25  24.52
February      23.49    24.35   24.23  36.00  24.30
March         23.60    24.25   24.28  36.60  24.34
April         25.70    26.77   25.63  39.25  26.60
May           26.50    28.46   26.38  42.80  27.98
June          24.95    27.94   25.72  43.00  25.66
July          24.10    28.25   24.58  43.00  25.46
August        23.99    27.81   24.90  42.60  24.33
September     23.92    26.13   24.90  40.80  24.14

1996/97
October       21.95    24.55   22.80  41.50  22.67
November      21.80    24.28   22.50  39.20  22.96
December      21.60    24.29   22.30  40.75  22.27
January       22.45    25.21   22.65  43.50  23.39
February      22.41    25.44   23.07  43.88  23.97
March 1       23.29    26.18   22.70  44.75  24.38

---------------------------------------------------
1/ Preliminary 2/ Decatur 3/ PBSY Greenwood, MS
4/ Minneapolis 5/ Southeast mills 6/ Chicago


Table 6--Oilseed meal prices
---------------------------------------------------
             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
1995/96     235.90  190.74  123.75  202.70  159.05

1995/96
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
May         244.30  191.25  137.00  212.00  177.00
June        238.80  192.20  135.00  210.00  178.75
July        252.50  201.56  135.00  224.25  174.00
August      261.20  193.10  126.25  227.00  170.00
September   276.40  193.10  125.60  192.80  167.50

1996/97
October     248.50  183.25  116.00  170.00  175.00
November    251.50  196.60  105.00  146.13  166.25
December    250.60  224.50  113.35  172.67  171.65
January     249.20  207.20  125.00  221.00  165.00
February    262.40  183.75  137.50  228.13  156.25
March1      280.50  189.10  121.70  225.00  163.30
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1/ Preliminary 2/ Hi-pro Decatur 3/ 41% Memphis 4/ Minneapolis 5/ 50% SE mills

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