OIL CROPS OUTLOOK                                             August 14, 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-0895.
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SOYBEANS TAKE THE HEAT
 
A high pressure system paused over the Midwest in July, swelling temperatures
above normal for several weeks.  While the heat has increased stress and water
demand on the soybean plant at a critical reproductive period, soil moisture
remains adequate.  Rains in late July and early August have improved crop
conditions.  Reports indicate that late-planted soybeans in Illinois,
Missouri, Kansas, Nebraska, and Indiana have been stunted by the hot weather
and are well behind in blooming and pod formation.  Another extended hot spell
in August without accompanying rainfall would be detrimental for good pod
development throughout the Midwest.  Short plants also make soybeans more
difficult to harvest, which could result in higher field losses this fall.
 
While conditions in the northern production area (Minnesota and Iowa) are
generally better than in the central part, crop conditions and projected
yields in nearly every major producing State are well below 1994.  For
instance, in Illinois, 53 percent of the soybean crop is in good-to-excellent
condition as of August 6, compared to 73 percent last year.  Only 21 percent
of the Illinois acreage had formed pods by this date, compared to the 58-
percent average.
 
Despite these concerns, the August Crop Production report indicated a
relatively normal 1995/96 national average soybean yield of 36.4 bushels per
acre, based on surveys conducted through August 1.  However, due to the
lateness of this year's development in some States, the estimate will be
tentative until the September production report, when a more reliable pod
count can be made in these States.
 
Better weather in late June allowed U.S. farmers to plant 62.6 million acres,
just 520,000 less than initial intentions.  Fewer acres were seeded than
intended in South Dakota, Illinois, and Missouri, but farmers in Nebraska and
Indiana partly compensated with more late planting.  Harvested area is
estimated about a half million acres lower than last month at 61.7 million
acres, reflecting reduced plantings.  Based on the expected yield estimate,
U.S. soybean production 1995/96 is forecast at 2,246 million bushels.  The
1995/96 supply and use forecasts for July and August are nearly identical.
 
Smaller soybean supplies and weaker export demand for U.S. soybean meal in
1995/96 are still expected to trim crush and meal production from 1994/95. 
Larger inventories of meal held by protein meal buyers, who are taking
advantage of this year's favorable prices, should also hold down 1995/96
soybean meal production.  Early in the marketing year, higher prices and a
smaller pig crop in the third calendar quarter should scale back protein meal
use in feed rations.  But based on expected farrowings, hog feeding will
likely rebound to a record high in the fourth quarter of 1995.  This should
keep domestic disappearance little changed from 1994/95's rapid pace.
 
U.S. soybean oil exports for 1995/96 are still anticipated to slip, from 2.6
billion pounds to 2.2 billion.  Given an abundant South American carryover and
robust crush this fall, the U.S. world market share should shrink from 22 to
19 percent in 1995/96 as smaller available supplies of soybeans and soybean
oil are anticipated in the United States.  Domestic disappearance should
continue to grow slowly.  The expected dropoff in demand should permit ending
stocks of soybean oil to rebuild and prices to ease a little.
 
STRONG FINISH FOR 1994/95 U.S. SOYBEAN AND SOYBEAN OIL EXPORTS EXPECTED
 
Ending stocks of soybeans for 1994/95 are estimated 5 million bushels lower
this month to 380 million, based on a higher export forecast.  U.S. soybean
and soybean oil exports are estimated higher this month, to 825 million
bushels and 2,625 million pounds, respectively, reflecting the heady pace of
shipments.  Although U.S. soybean exports are still declining from month to
month, soybean sales have exhibited seasonal strength due to buoyant world
demand and slow shipments from South America.  Brazilian and Argentine 1994/95
season total soybean exports are estimated down 200,000 and 150,000 metric
tons this month, because of sluggish sales to Europe and unusual stock holding
by farmers and the central government in Brazil.
 
WORLD OILSEED PRODUCTION PROJECTED DOWN IN 1995/96
 
World oilseed production, though projected marginally higher this month to
254.4 million metric tons, is still down almost 6 million tons from 1994/95. 
Small increases in soybeans, rapeseed, sunflowerseed, and peanuts more than
offset small declines in copra, cottonseed, and palm kernel.
 
Global rapeseed output is projected up to 32.5 million tons based on sharp
expansion of European Union and Chinese production.  Excellent conditions at
harvest for France and the U.K. boosted yields in both countries to the
largest levels since 1990.  Reports following China's harvest of winter
rapeseed show higher area and improved yields.  Canada's rapeseed (canola)
production is projected lower by 200,000 tons to 6.4 million, due to growing
conditions that have damaged yield prospects.
 
Argentine sunflowerseed outturn is expected up by 200,000 tons in response to
a severe drought in southern Buenos Aires and Cordoba provinces that curtailed
wheat plantings.  Hungary's sunflowerseed output is forecast at a record
900,000 tons, up 100,000 tons from last month's projection.  Area and yields
are benefiting from last year's striking returns for sunflowerseed and fair
growing conditions in 1995/96.
 
U.S. SOYBEAN AND SOYBEAN MEAL EXPORTS UNCHANGED IN 1995/96
 
This month's negligible change in total supplies left the export forecasts for
U.S. soybeans and soybean meal unchanged, at 21.8 and 5.3 million metric tons. 
However, larger Argentine and Brazilian soybean carryover in 1994/95 will
likely push their total crush and soybean meal exports to a record in 1995/96.
 
CHINA'S EDIBLE OIL DEMAND CLOUDS VEGETABLE OIL PROSPECTS FOR 1995/96 
 
China remains the largest source of uncertainty for 1995/96, with rapeseed oil
imports shrinking 200,000 tons to 450,000 this month.  Flat demand in China
and keen domestic offtake in the EU will likely drive EU rapeseed exports down
almost 200,000 tons to 1.6 million (including intra-trade).  The large
expansion in industrial EU oilseed area last year reflects the attractiveness
of the different pilot programs for biodiesel within Europe.  EU farmers have
used the flexibility of the programs to increase production and consumption.
 
Malaysian palm oil exports are projected down from last month to 6.9 million
tons, based on less than anticipated production for 1994/95 and 1995/96.  Palm
oil imports in India are projected at 525,000 tons, up 100,000 from last
month, based on expected declining supplies of peanut oil and a substantial
demand for vegetable oil.  Global copra exports are also projected down,
reflecting expectations for lower output in the Philippines.
 
SUMMER WEATHER GENERATES PRICE RALLIES FOR SOYBEAN OIL AND MEAL
 
The price spread for soybeans between Gulf ports and Illinois processors was
about 40 cents in July, which is unusually strong for this time of year. 
While some of the price rise may be due to higher barge rates on the
Mississippi River, it also suggests that soybean export demand is seasonally
good.
 
Soybean crush is also experiencing a seasonal slowing, but is still high for
this time of year.  This June was the first time that June crush (105.6
million bushels) had ever exceeded 100 million bushels.  The remaining 208
million bushels needed to reach USDA's 1994/95 crush projection of 1,395
million bushels suggests record monthly crush for July and August.
 
Stocks of soybean oil dropped again, falling to 1,107 million pounds at the
end of June.  This implies better than expected domestic disappearance in
1994/95, which was raised 50 million pounds to 12,950 million this month. 
Cumulative soybean oil exports through May increased to 2.24 billion pounds,
up from 996 million last season.  A slightly more promising sales outlook
caused USDA's 1994/95 export projection to rise by 25 million pounds.  End-of-
September stocks are now projected to fall to 1,025 million pounds, below last
season's very low carryout.
 
U.S. soybean oil prices rallied to average 27.6 cents per pound in July as
high temperatures stressed crops.  The world market also watched the weather
situation in India, the world's second-largest consumer of vegetable oils. 
The late monsoon threatened groundnut production (the source of India's
principal cooking oil) and delayed the seeding of soybeans and rapeseed. 
Daily soybean oil prices receded to nearly 26 cents per pound after rains in
the Midwest and after the monsoon rains finally arrived in the parched areas
of India's northwestern oilseed growing region, allowing planting to commence.
 
In July, the price for high-protein soybean meal averaged $170.45 per ton, its
highest level of 1995.  Daily prices dropped late in the month as some growing
areas received much needed rain.  The estimated average price for 1994/95
increased this month to $160 per ton.
 
SUNFLOWER PRODUCTION APPEARS HEALTHY
 
Warm weather has accelerated sunflower development, although progress is still
behind normal.  In early August, 32 percent of the sunflower crop in North
Dakota had reached the bloom stage, compared to the 43-percent average. 
Though trailing in development, 81 percent was rated in good to excellent
condition.
 
******************************************************************************
Information Contacts:
Mark Ash         Soybeans, Minor Oilseeds, Fats and Oils    (202) 219-0838
Scott Sanford    Peanuts, Cottonseed                        (202) 219-0835
Jaime Casteneda  World Oilseeds                             (202) 219-0826
******************************************************************************
 
The next release of the Oil Crops Outlook is scheduled for 4:00 p.m. ET
Wednesday, September 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 & 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    2,558    2,773     1,395    825    173    2,393    380
1995/96 2/  380    5    2,246    2,631     1,385    800    121    2,306    325
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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     33,015    33,225       26,725   6,250   32,975    250
1995/96 2/  250     32,920    33,235       27,100   5,885   32,985    250
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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   15,487   16,600       12,950   2,625   15,575   1,025
1995/96 2/  1,025   15,510   16,545       13,000   2,205   15,205   1,340
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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
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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
 
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    10.80    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
July1          5.93    NA      11.50     NA     5.20
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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 
---------------------------------------------------
                     Cents/lb.
                                                   
1990/91       21.00    22.30   23.60  45.50  27.50 
1991/92       19.10    20.10   21.60  27.30  25.82 
1992/93       21.40    25.00   25.30  27.40  20.90 
1993/94       27.09    27.78   31.00  43.20  26.38 
                                                   
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 
July1         27.60    28.26   28.69  39.13  27.38
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1 Preliminary 2 Decatur 3 Valley points 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
 
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
July1       173.25  116.25   73.75  138.75   92.50
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1 Preliminary 2 Hi-pro Decatur 3 41% Memphis 4 Minneapolis 5 50% SE mills
 
                                   END-END-END