Oil Crops Outlook                                                     OCS-0795
United States Department of Agriculture              Economic Research Service
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Approved by the World Agricultural Outlook Board                July 13, 1995
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U.S. 1995 SOYBEAN ACREAGE CLIMBS ON DELAYED GRAINS PLANTING

The June 30 Acreage report confirmed the upward revision in soybean plantings
above March intentions, as U.S. farmers indicated they planted 63.1 million
acres of soybeans.  This is up from earlier intentions of 61.5 million.  While
this is far from the record of 71.4 million acres planted in 1979, it would be
the largest soybean acreage planted since 1985.  

Of the top 10 States in soybean acreage (constituting 80 percent of the U.S.
total), Illinois, Iowa, Minnesota, Indiana, Nebraska, and South Dakota each
had record planted acreage, while Ohio and Kansas had slightly below record
plantings.  These States generally had the largest changes from March
intentions, as well, although Kansas and Nebraska soybean plantings were
smaller.  Favorable cotton returns continued to depress Southern soybean
acreage, although Delta soybean plantings were a bit higher than March
intentions.

The magnitude of the soybean acreage increase is surprising considering
1994/95's record production and large expected carryover, but can be explained
by a number of factors.  The ARP increase to 7.5 percent for corn in 1995
reduced the base acres that could be planted to corn, which should have
lowered the normal flex acres (NFA) flexed to soybeans.  However, USDA's
preliminary compliance report on the 1995 farm program indicated that farmers
intended to plant almost 6 million acres of soybeans on flex acreage, up from
2.8 million acres in 1994.  Over two-thirds of soybeans flexed were on corn
base acres.  Flooding and wet soil conditions prevented farmers from planting
corn on schedule, especially in the areas neighboring the Missouri, Illinois,
and Ohio Rivers.  Although prices this spring favored fewer soybeans flexed
onto corn base acreage, farmers switched to soybeans as their next best
alternative because of the delays.  Farmers also may have planted fewer corn
acres because of high fertilizer prices.

The acreage report could be revised in August, however, as farmers will be
resurveyed this month to determine how much of the late-seeded acreage was in
fact planted to soybeans or other crops.  Approximately 52 percent of soybeans
had been planted prior to the June survey, well below the usual 74 percent by
this time.

With projected harvested area of 62.2 million acres, total 1995 soybean
production is projected at 2.24 billion bushels.  While this is almost 320
million bushels less than last year, it would still rank as the third-largest
U.S. harvest.  Total 1995/96 supplies would be just 5 percent less than this
year.

While the expansion in soybean acreage portends another large crop, the
lateness of planting pushes crop development further back into a generally
warmer, drier period.  As of July 9, 8 percent of soybeans were blooming,
compared to the previous 5-year average of 21 percent.  This situation exposes
the crop to additional yield risk, so that the Chicago Board of Trade may
experience volatile price swings for soybean futures this summer with each new
weather forecast.  Even so, current crop conditions, while mediocre compared
to last season's record-yielding crop, are much better than the similarly-
delayed 1993 crop.

Although the 1995/96 soybean production forecast is higher this month, it is
offset by forecasts for lower beginning stocks and greater use.  Projected
ending stocks for 1995/96 at 325 million are down 30 million bushels from the
June forecast.  The tighter supply situation caused the range for soybean
prices to be raised 25 cents to $5.50-$6.50 per bushel.

Crushing margins will likely dip in 1995/96 (although still in a favorable
range), marginally reducing U.S. crush from this year to 1,385 million
bushels.  Easing export demand for soybean oil and meal and slower growth in
domestic meal consumption will subtract a little profitability from the
crushing industry.  While soybean meal prices will rise along with soybeans,
soybean oil prices for 1995/96 should drop into the 24.5-29.0-cents-per-pound
range, slipping from the 27.25-cents-per-pound average this season.

Although expected crush for 1995/96 is 10 million bushels less than this
year's crush, a slightly higher projected oil extraction rate of 11.2 pounds
per bushel would produce 15.5 billion pounds of soybean oil, barely surpassing
this year's expected record.  Projected soybean meal production in 1995/96, at
32.9 million tons, would be just shy of 1994/95's all-time high.

U.S. SOYBEAN AND SOYBEAN PRODUCT EXPORTS ARE PROJECTED DOWN IN 1995/96

U.S. soybean and soybean meal exports are projected at 800 million bushels and
5.9 million short tons in 1995/96, down 2 and 6 percent from a year earlier. 
Lower available U.S. supplies and a moderate decline in crush margins in the
EU account for most of the expected decline in U.S. soybean exports.  Although
production was larger, South America exported fewer soybeans in 1994/95 than
in 1993/94.  The delays in this year's crush mean South America's exports of
meal and oil likely will pick up early in 1995/96.  India's soybean and
soybean meal production is also expected to recover and boost its meal exports
by 600,000 metric tons.

U.S. soybean oil exports for 1995/96 are forecast at 2.2 billion pounds,
moderately below 1994/95's second-ranked 2.6 billion pounds.  Continued strong
growth in the global vegetable oil market will allow U.S. soybean oil exports
to remain brisk despite rising export competition from South American soybean
oil and sunflowerseed oil, and Asian palm oil.  U.S. carryout stocks of
soybean oil for 1995/96 would exceed the tight 1994/95 expected carryout by
315 million pounds.

1995/96 WORLD OILSEED SUPPLIES NEARLY UNCHANGED FROM 1994/95

Despite a projected drop in global oilseed output in 1995/96, total oilseed
supplies will remain relatively high.  Large carryin stocks and production of
254 million metric tons will push world supplies to a record 281 million tons
for 1995/96.  Foreign production is projected up 1 percent to 170 million
tons, while U.S. output is expected to fall 10 percent to 73 million tons.

Rising vegetable oil prices in 1994/95 increased the contribution of oil as a
percentage of the seed value.  This factor will likely stimulate the
production of high oil-content seeds such as rapeseed and sunflowers in
1995/96.  Also, cottonseed output is projected up in response to higher global
cotton prices.

World soybean production is projected to fall 7 percent to 128 million metric
tons with the United States, Brazil, and China accounting for nearly all of
the decline.  Extremely low soybean prices in Brazil and better expectations
for cotton and corn will likely force farmers to switch area out of soybeans. 
A return to normal yields in Paraguay would drive production slightly below
1994/95 levels, while in Argentina, expansion in soybean area and production
will be limited by strong competition from other crops, especially corn and
sunflower.  Likewise, China's soybean output is expected down as soybean area
is shifted to other crops, primarily corn and cotton. India's soybean
production is projected to recover to match the 1992/93 record of 4 million
tons.  Sporadic monsoon rains and a heat wave have contributed to a
significant dry spell in India, and normal conditions for the remainder of the
season would allow the projected production to be realized.

CONTINUED STRONG GROWTH FOR PROTEIN MEAL DEMAND IN 1995/96

Global meal consumption in 1995/96 is projected up 3 percent to 142 million
metric tons, with increases in all meals except peanut meal.  For the sixth
consecutive year, world consumption of soybean meal (87 million tons) is
expected to be record high.  Although keen demand in all regions support the
rise in meal consumption, a vital component of this increase has been the
European Union (EU).  Soybean meal offtake in the EU has grown during the last
2 years as market prices for grains failed to reflect the substantial drop in
the intervention price.  Also, profitable crush margins, a price ratio
favoring soybean meal rather than feed grains, and a depreciated dollar kept
EU consumption and imports running above previous years.  In 1995/96, EU
soybean and soybean meal consumption is likely to remain strong but near
1994/95 levels in response to more moderate, but stable crush margins.  Also,
stronger European currencies will mean more imports as foreign soybean meal
replaces domestic feed grains and pulses.
WORLD TRADE PROSPECTS FOR OILSEEDS ARE MIXED

In 1995/96, world oilseed trade is projected to fall, protein meal trade to
expand, and vegetable and marine oils to remain unchanged.  Reduced
availability of soybean supplies (primarily in the United States, but also in
South America and China), coupled with somewhat less attractive crush margins
will trim world oilseed trade.  In contrast, abundant soybean meal supplies
from South America and India will prevent soybean meal prices from rising
excessively, resulting in expansion in protein meal trade.  China is projected
to maintain the strong levels of consumption and imports observed in 1994/95,
but show no further growth, thus limiting the expansion in global vegetable
oil trade.

Similarly, world soybean exports are projected down 2 percent to 31.6 million
metric tons, while world exports of soybean meal are up 2 percent to 31.5
million tons.  Global soybean oil exports remain roughly unchanged at 5.3
million tons.  Import demand will remain weak in the Former Soviet Union as
purchasing power continues to fall.  In Japan and Korea, soybean imports show
no significant growth as meat imports rise in response to lower tariffs. 
Taiwan's environmental concerns and Indonesian crushing capacity are expected
to slow growth in soybean imports, while two consecutive large crops in Brazil
will prevent substantial Brazilian soybean imports during 1995/96.  In
contrast, the EU is expected to maintain strong imports of soybeans and
soybean meal at 14.9 and 16.8 million tons, respectively.  Also, Mexico's
soybean imports are expected to rebound to 2.3 million tons in response to
improved economic conditions and an additional credit line for U.S. exports.

SEASONALLY STRONG 1994/95 SOYBEAN AND PRODUCT EXPORTS CONTINUE TO FEED CRUSH

U.S. exports of soybeans and soybean meal and oil normally plunge by May.  The
decline in product exports after the South American harvest typically results
in a contraction in U.S. soybean crush.  But this year that pattern has
developed unusually late, especially considering the large Brazilian and
Argentine crops.

Estimated 1994/95 U.S. exports of soybeans were raised this month to 820
million bushels, due to unusually slow Brazilian marketings.  Forecast U.S.
crush for 1994/95 also went up this month, to 1,395 million bushels.  The
crush was boosted on the basis of continuing strength in meal and oil exports,
which are also aided by slower South American shipments.  U.S. soybean meal
and soybean oil exports for 1994/95 are now forecast higher to 6.25 million
short tons and 2.6 billion pounds, respectively.

1995/96 U.S. SUNFLOWERSEED ACREAGE RISES AGAIN

USDA's June Acreage Report revised upward the 1995 estimate of sunflowerseed
planted area to 3.608 million acres, 95,000 acres above the March Prospective
Plantings report.  Acres planted to oil-type sunflowers are estimated to total
3.1 million, up 2 percent from last year, while acreage of the non-oil type is
estimated at 513,000 acres, down 2 percent.

Planted acres in North Dakota are expected to decline slightly in 1995 by
40,000 acres.  North Dakota continues to dominate the sunflower acreage in
1995 with 1.55 million acres seeded (43 percent of U.S. planted acreage). 
Minnesota is the only other sunflower producing State where planted area is
expected to decrease, by 8 percent to 460,000 acres in 1995.  All other States
are expected to increase sunflower acreage in 1995 (see ERS Autofax Document
#2305).

Lateness in planting the spring wheat crop has meant even more sunflowerseed
acreage in 1995.  While the preliminary enrollment report shows farmers
intended to reduce plantings of minor oilseeds on program base from 1.6
million to 1.3 million acres, subsequent weather conditions may have induced
more spring grain farmers to take advantage of the 0-92 program.  This option
allows them to plant sunflowers and other minor oilseeds on wheat program
acres and retain 92 percent of their deficiency payments.  In 1994, about 1.4
million acres of sunflowers (38 percent of total acres) were planted under the
0-92 program.  Sunflower planting and crop development is also well behind
schedule this year.  By June 11, 34 percent of the North Dakota acreage had
emerged, compared with 73 percent on average.  While sunflowers may be
successfully planted through the end of June, the shorter season makes a
repeat of 1994's sunflower yields remote this year.

RECORD U.S. CRUSH FOR 1994/95 DUE TO STRONG OFFTAKE OF SUNFLOWER OIL AND MEAL

Sunflowerseed crush for 1994/95 is expected to reach a record 1.25 million
metric tons, according to this month's forecast.  U.S. sunflowerseed exports
for 1994/95 are expected to more than double from last year and reach 227,000
metric tons.  Despite the remarkable expansion of total demand for
sunflowerseed in 1994/95, ending stocks are expected to soar to 284,000 metric
tons, a 300-percent increase from the previous season, due to the fact that
the 1994 crop is the third-largest in history.

Domestic disappearance of sunflowerseed oil is expected to climb to 130,000
metric tons, while 1994/95 exports are estimated at 355,000 metric tons.  This
year, domestic disappearance of sunflower meal is estimated to be 553,000
metric tons, 90 percent above last year's.  Exports of meal in 1994/95 are
expected to follow the same path and increase by 84 percent to 68,000 metric
tons.


The next release of the Oil Crops Outlook is scheduled for 4:00 p.m. ET
Monday, August 14.
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    8    2,558    2,775     1,395    820    173    2,388    385
1995/96 2/  385    5    2,240    2,630     1,385    800    120    2,305    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       12,900   2,600   15,500   1,100
1995/96 2/  1,100   15,510   16,620       13,000   2,205   15,205   1,415
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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

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    30.30   4.54
October        5.30   96.00    10.80    28.80   4.49
November       5.36  107.00    10.60    25.60   4.51
December       5.41  104.00    10.30    25.40   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
June1          5.62    NA      10.20     NA     4.86
--------------------------------------------------------
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 
June1         26.78    26.72   27.00  39.00  26.61 
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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
June1       160.40  110.42   61.00  134.00   85.00
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1 Preliminary 2 Hi-pro Decatur 3 41% Memphis 4 Minneapolis 5 50% SE mills

******************************************************************************
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
******************************************************************************