OIL CROPS OUTLOOK                                            December 13, 1995
            Approved by the World Agricultural Outlook Board
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OIL CROPS OUTLOOK is published monthly (except January) by the Economic
Research Service, U.S. Department of Agriculture, Washington, DC 20005-4788. 
OCS-1295.  
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SOUTH AMERICAN SITUATION AFFECTS U.S. MARKET OUTLOOK
 
The current pace of soybean exports for 1995/96 is slightly ahead of a year
earlier, but higher prices are expected to slow foreign use later in the crop
year.  Recent EU initiatives are adding to grain availability that will
substitute for EU soybean imports and soybean meal consumption.  Slow
marketings by Brazil earlier this year helped 1994/95 U.S. exports to a strong
finish.  But rising prices since last summer will help bring the seasonally
large Brazilian stocks to market, competing head-to-head with this fall's
marketings from the United States.  And unlike last season, when Brazil
imported 26 million bushels of soybeans from the United States, little such
trade is expected this year.  Brazil's imports from all sources are projected
1 million metric tons lower than in 1994/95.
 
SOYBEAN MEAL PRICE CONTINUES CLIMBING
 
Uncertainty regarding the prospects for Brazilian acreage and production is
supporting U.S. soybean meal and soybean prices.  U.S. farm prices rose
significantly in November, to $6.43 per bushel, up from $6.15 in October.  The
Decatur, Ill., high-protein meal price reached $204 per ton in November, $37
higher than just 3 months earlier.  Credit difficulties for farmers are
expected to reduce Brazilian soybean production from last year as fewer inputs
are applied.  And if the current dry spell in southern Brazil persists, world
prices could soar early in 1996.  The dryness has already prevented farmers
from planting at their usual rate.  Continuing dryness could cause poor seed
germination and weak plant establishment.
 
U.S. export sales of soybean meal are trailing last year's pace, but could
soon pick up.  Soybean meal stocks at U.S. mills plunged in October,
indicating a strong offtake during the month.  Larger rapeseed crops in Europe
this year help reduce the need to crush as many imported soybeans to satisfy
oil requirements.
 
SOYBEAN OIL TAKES A BACK SEAT AGAIN
 
With global tightness of vegetable oils easing and protein meal demand
strengthening, the oil market again returns to a secondary role for
determining soybean product value.  Rising input prices and falling oil prices
are squeezing crush margins from a year ago.
 
End-of-month stocks of soybean oil rose in October to the highest level since
August 1994 as production rebounded.  Total use of soybean oil in October was
down markedly from October 1994, which also contributed to higher stocks. 
Export sales and shipments of U.S. soybean oil are significantly below this
time last year.  But lower U.S. prices should soon perk up exports.  U.S.
soybean oil prices have fallen steadily throughout 1995, from 29.0 cents in
January to 25.4 cents in November.  Concerns about South American production
should keep prices from sinking much further, however.
 
China remains the key player in the world oil market.  However, China is
currently taking much of its soybean oil imports from South America, so U.S.
oil exports likely will not pick up for several more months.
 
FOREIGN OILSEED PRODUCTION STILL PROJECTED DOWN FROM LAST YEAR
 
Despite increases this month for Argentina, China, India, and Europe, 1995/96
foreign oilseed production remains substantially below last year's record.
Rain returned to most of Argentina's soybean and sunflowerseed producing
areas, providing relief from the severe drought.  Both Argentine sunflowerseed
and soybean yields were raised this month, boosting soybean and sunflowerseed
production to 12.7 and 5.8 million metric tons, respectively.  Although
growing conditions for soybeans have deteriorated in southern Brazil, Brazil's
estimated 1995/96 soybean output remains unchanged from the November forecast
because the window of opportunity for planting remains ample and weather could
turn favorable.  Corn that has already been planted in Brazil is in poor
condition, so an improvement in moisture conditions could shift some acreage
to soybeans through replanting.  Signs of larger area and yields are driving
crop prospects for rapeseed in India to a near-record 6 million tons.
 
Foreign soybean trade for 1995/96 is unchanged from last month, while soybean
meal trade is projected to fall 1 percent to 31.6 million tons.  All of this
month's decline in meal trade is in imports by the EU, where consumption is
projected to drop 1 percent to 23.9 million tons.  Strong world soybean meal
prices, increasing EU sorghum imports, and a current EU tax on wheat exports,
should favor consumption of grains over soybean meal.  Global economic
conditions favor imports of soybeans over soybean meal by the EU.  Crush
margins remain favorable and have risen since May, while the soybean-soybean
meal price ratio is down 11 percent since June 1995.
 
In Brazil, projected soybean meal consumption is 4.95 million tons, up 150,000
from last month but unchanged from 1994/95.  Extremely low soybean meal prices
pushed Brazil's domestic consumption to a record high during 1994/95.  Strong
corn prices and robust poultry production in Brazil are expected to maintain
soybean meal consumption at last year's level.
 
Global soybean oil exports climbed slightly in response to gains in the
Argentine soybean crush.  Soybean oil imports were raised this month in Iran,
Chile, Colombia, and Peru.  Falling soybean oil prices are expected to boost
consumption in these countries to levels obtained in 1994/95.
 
******************************************************************************
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 release of the OIL CROPS OUTLOOK is scheduled for 4:00 p.m. ET
Friday, January 12.
 
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---------------------------
 
1993/94     292    6    1,871    2,170     1,276    589     96    1,961    209
1994/95 1/  209    6    2,517    2,731     1,405    838    153    2,396    335
1995/96 2/  335    5    2,183    2,523     1,395    800    113    2,308    215
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1/ Estimated.  2/ 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 tons-----------------------------
 
1993/94     204     30,514    30,788       25,283   5,356   30,638    150
1994/95 1/  150     33,265    33,479       26,538   6,717   33,256    223
1995/96 2/  223     33,042    33,325       27,000   6,100   33,100    225
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1/ Estimated.  2/ 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---------------------------
 
1993/94     1,555   13,951   15,574       12,941   1,529   14,471   1,103
1994/95 1/  1,103   15,613   16,733       12,916   2,680   15,596   1,137
1995/96 2/  1,137   15,695   16,845       13,050   1,950   15,000   1,845
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1/ Estimated.  2/ 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        5.45  101.00    10.60    29.00   4.65
 
1993/94:
September      6.21  104.00    14.20    32.00   4.24
October        6.01  112.00    11.20    30.00   4.09
November       6.32  122.00    11.60    29.50   4.05
December       6.64  123.00    13.00    29.70   4.18
January        6.72  126.00    13.60    36.10   4.38
February       6.71   97.00    15.10     NA     4.61
March          6.73     NA     15.00     NA     4.64
April          6.57     NA     15.00     NA     4.60
May            6.77     NA     15.60     NA     4.43
June           6.72     NA     14.20     NA     4.25
July           5.92     NA     12.40     NA     4.28
August         5.58   89.00    12.60     NA     4.52
 
1994/95
September      5.47  101.00    10.70    30.60   4.54
October        5.30   96.00    10.50    28.60   4.49
November       5.36  107.00    10.60    25.90   4.51
December       5.41  104.00    10.30    25.80   4.71
January        5.47  101.00    10.60    25.70   4.75
February       5.40   97.00    10.80     NA     4.94
March          5.51    NA      10.40     NA     5.15
April          5.55    NA      10.70     NA     5.10
May            5.56    NA      10.50     NA     4.93
June           5.68    NA      10.50     NA     5.13
July           5.90    NA      11.50     NA     5.10
August         5.83  100.00    11.40    30.70   5.16
 
1995/96
September      5.99   99.00    11.00    29.70   5.11
October        6.15   97.00    11.00    28.80   5.11
November1      6.43  114.00    10.70    28.70   5.04
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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    22.30   23.67  45.50  27.50 
1991/92       19.10    20.10   21.63  27.30  25.82 
1992/93       21.40    25.00   25.37  27.40  20.90 
1993/94       27.09    27.78   31.08  43.20  26.38 
1994/95       27.55    25.80   28.10  44.30  26.47 
                                                   
1993/94:                                           
October       22.96    24.79   26.33  40.20  22.25 
November      25.43    26.69   28.20  43.33  23.06 
December      28.27    30.39   32.11  43.17  26.93 
January       29.91    33.16   35.08  46.10  28.00 
February      28.85    29.96   33.68  46.12  29.89 
March         29.03    29.60   33.48  44.50  30.30 
April         27.90    29.06   33.00  43.40  29.63 
May           29.10    29.66   33.50  44.25  29.48 
June          27.60    27.55   31.34  43.75  29.43 
July          24.53    24.20   28.89  44.00  27.20 
August        25.38    23.71   28.13  45.00  25.02 
September     26.12    24.51   29.28  43.10  24.87 
                                                   
1994/95                                            
October       27.06    23.64   28.90  46.00  24.73 
November      29.84    24.85   29.40  50.88  24.75 
December      30.61    25.50   30.63  53.80  24.75 
January       29.04    26.41   29.25  50.25  28.01 
February      28.15    25.63   27.66  41.83  27.26 
March         28.33    26.41   27.97  41.00  28.17 
April         27.16    24.00   26.89  41.25  27.30 
May           26.00    24.24   26.34  40.25  26.42 
June          26.78    26.72   27.30  39.00  26.61 
July          27.60    28.25   28.69  39.13  27.38 
August        26.56    27.09   27.47  41.50  26.35 
September     26.21    26.50   27.41  41.30  25.93 
 
1995/96
October       26.57    28.12   27.49  42.50  26.05 
November1     25.41    26.88   26.48  41.63  25.54
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1 Preliminary 2 Decatur 3 Beginning Oct 1995, 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
 
1993/94:
October     194.50  173.10   90.00  196.00  147.50
November    209.40  181.00   90.00  197.00  161.80
December    206.00  180.00   89.40  200.00  155.25
January     198.30  170.30   97.00  209.00  140.25
February    198.40  173.10   98.75  207.50  136.25
March       195.40  174.00    N/Q   198.75  127.20
April       188.90  166.25    N/Q   191.00  125.50
May         193.75  157.75  105.00  187.50  125.00
June        195.50  154.10  102.50  163.75  111.90
July        181.10  152.50   97.50  164.00  114.90
August      178.60  144.50   90.75  153.75  111.60
September   174.50  145.00   85.00  114.80   NA
 
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
November1   204.07  165.00   95.50  175.00  144.00
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1 Preliminary 2 Hi-pro Decatur 3 41% Memphis 4 Minneapolis 5 50% SE mills
 
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