OIL CROPS OUTLOOK                                          October 14, 1997
October 1997, OCS-1097
             Approved by the World Agricultural Outlook Board
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OIL CROPS OUTLOOK is issued monthly by the Economic Research Service, U.S.
Department of Agriculture, Washington, DC 20005-4788.  Electronic release only,
no published copies are available.   
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Bumper Soybean Harvest Streams In

In the October Crop Production report, USDA reduced its forecast
of 1997 soybean production to 2,722 million bushels, down 24
million from the previous forecast.  Although the U.S. average
yield was shaved to 39.0 bushels per acre, it still stands as the
second-highest yield ever.  Most of the soybean yield reductions
were made for Iowa, Minnesota, and Nebraska.  Persistent summer
dryness cut yields in several southeastern States as well.

As of October 5, 37 percent of U.S. soybeans had been harvested,
compared to the 5-year average of 23 percent.  The swift harvest
pace this year has been advanced by quicker soybean maturity and
nearly ideal dry weather, although an absence of frost in some
areas has delayed the drydown to desired moisture levels.  The
faster the harvest, the greater the pressure on soybean prices. 
Since late August, central Illinois cash soybean prices have
already fallen as much as $1.50 per bushel to around $6.10.  USDA
forecasts a 1997/98 average soybean farm price of $5.75-$6.85 per
bushel.

Abundant U.S. Supplies, Scant Foreign Competition To Spark Heavy Use

USDA's Grain Stocks report indicated that 132 million bushels of
soybean stocks remained in all locations on September 1.  The
larger than anticipated carryover stocks affected the 1996/97
balance sheet mostly by a downward revision in the residual use
category, to 47 million bushels.

Despite the low carryover, the early 1997 harvest progress
allowed a significant gain in the September crush pace.  This
raised the estimate of 1996/97(October/September) production of
soybean meal and oil to 34.2 million short tons and 15.7 billion
pounds, respectively.  Projected 1997/98 crush remains at 1,495
million bushels.

U.S. 1997/98 soybean exports are forecast at 960 million bushels
up from 882 million a year earlier.  Even with record soybean
production expected in South America next year, currently tight
world supplies and brisk foreign demand will generate about 6
months of heavy export trade from the United States.  Export
sales of soybeans were at an all time high of 381 million bushels
as of October 2, and are 81 percent higher than a year ago. 
Current sales to the EU and China have been very active.

Total 1997/98 soybean supplies will increase 283 million bushels
from 1996/97, nearly double the gain in total demand.  Although
the decline in production from last month trims projected
yearending stocks from last month, a year- to- year increase is
still expected, to 270 million bushels.  

Projected U.S. exports of soybean meal are 7.4 million short
tons, up from 7.1 million in 1996/97.  Larger soybean crush and
meal exports by Argentina and India will constrain U.S. exports,
offsetting gains in Chinese soybean meal consumption.

With a larger U.S. livestock population and considerably lower
soybean meal prices, 1997/98 domestic disappearance is
anticipated to rise to 28.2 million short tons from 27.2 million
in 1996/97.  This season's high protein soybean meal price is
projected to average $190-$210 per short ton, considerably less
than the $271 per ton 1996/97 average.  The recent Hogs and Pigs
report suggests that a solid expansion in hog production is
underway.  The 1997 summer pig crop increased a robust 7 percent
from a year earlier.  Despite more modest growth in the breeding
herd, farrowing intentions for the coming fall and winter
quarters are up 7 and 8 percent, respectively, from a year
earlier.

Robust World Demand For Soybean Oil Brightens U.S. Export Outlook

Soybean oil stocksas of September 1 sharply declined to 1.7
billion pounds due to recent expansion of domestic offtake and
exports.  Stocks are expected to slide to 1.55 billion pounds by
the end of the marketing year on September 30, 1998.  The recent
upsurge in demand lifts the 1996/97 estimates of U.S. domestic
disappeance and exports to 14,215 million and 2,050 million
pounds, respectively.  Domestic soybean oil prices reacted by
creeping back up above 23 cents per pound in September, even with
impending harvest pressure.  For 1997/98, soybean oil is expected
to average 23-26 cents per pound.

Declining supplies and rising prices in China for vegetable oils
will buoy the current wave in imports through 1997/98.  Despite
an increase in the soybean oil tariff, smaller 1997 Chinese
oilseed production will extend the oil deficit and attract
imports for some time.  China will account for more than
one-fourth of the world's soybean oil imports.  The United States is
well positioned to take advantage of this opportunity.  U.S.
1997/98 soybean oil exports are expected to swell to 2,400
million pounds, largely in anticipation of the growing Chinese
market.  Outstanding U.S. export sales of soybean oil are well
ahead of last year's pace, although a majority to unknown
destinations.

World Oilseed Production To Set Record

Global oilseed production in 1997/98 is projected at a record
276.4 million metric tons, up 7 percent from last season. 
Substantially larger oilseed crops in the United States and
Argentina would more than offset projected declines in China
(peanuts) and India (peanuts and cottonseed).  World soybean
production is forecast up 16 million metric tons from last
season, with foreign production accounting for 42 percent.

China's soybean crop for 1997/98 is expected to reach 13.5
million tons, slightly higher than in 1996/97.  China is expected
to import 3.0 million tons of soybeans and 4.0 million tons of
soybean meal in 1997/98.  These record  imports are the result of
more favorable world prices for soybean meal and a shortage of
domestic protein resources.  Efforts by the Chinese crushing
industry to convince the government to adopt higher tariffs and
smaller import quotas are not expected to succeed, as China is
making a serious bid to join the World Trade Organization by
lowering trade barriers on all goods.

Forecast soybean production in India for 1997/98 was raised this
month from 4.5 million metric tons to 5.0 million.  This was
based on higher expected area of 5.5 million hectares, which is
up from 5.0 million in 1996/97.  Timely monsoon rains produced an
excellent growing season.  The first cuttings from this harvest
began in early October.  This year's larger output will increase
crushing to 4.5 million tons.  Asian demand for protein meal
should be quite active, which would raise forecast Indian soybean
meal exports to 3.0 million tons.

The Brazilian soybean crop for 1997/98 is forecast to reach 28.0
million tons, up 1.5 million from 1996/97 assuming average
yields.  The wet September weather in southern Brazil has boosted
topsoil moisture for the upcoming planting season.  Higher-than-normal
seed and fertilizer sales to date support the projection
for greater 1997/98 soybean area.

A Brazilian government commission recently agreed to reverse a
stance on imports of genetically modified soybeans.  The
commission's decision still prohibits planting genetically
modified seed.  However it would allow Brazil to import 1.55
million tons of soybeans this year to be crushed under the
drawback plan, which requires reexporting the products.  The
imports will allow Brazilian soybean crushers to continue
operating through the new-crop harvest next year, although the
1997/98 crush is expected only to be slightly above last
season's.

The welcome return of rain to Argentina should prepare soils for
planting of sunflowerseed.  Planting of sunflowers is now
proceeding on schedule and soybean planting should begin in early
November.  Argentina's 1997/98 sunflower crop is estimated at 6.0
million tons, up 15 percent from 1996/97.  Total oilseed
production for Argentina is estimated at 21.4 million tons, up 22
percent from a year earlier.

Argentina's 1997/98 soybean crush was forecast higher this month
to 11.85 million tons, which would be down slightly from the
estimated 1996/97 volume of 11.95 million.  This was based on
higher expected Argentine imports that are needed to bridge a
deficit until the new crop arrives.  Although the infrastructure
is not well suited to import soybeans (which include sales to
date of 60,000 tons from the United States), low supplies mandate
imports to maintain minimum crushing margins.  Record high
production of cottonseed and sunflowerseed should also help use
more of the ample Argentine crush capacity.

Greater World Trade in Oilseeds, Meals, and Oils Projected in
1997/98 

Global trade for major oilseeds and products is expected to reach
a peak of 50.3 million tons in 1997/98, surpassing last season's
total by 3.4 million tons.  Soybeans will remain the undisputed
leader with more than 38 million tons traded in 1997/98. 
Rapeseed trade is expected to remain almost unchanged  at around
5.5 million tons.  Sunflowerseed trade is expected to
substantially increase to 3.7 million tons, exceeding the 1996/97
volume by 34 percent.

Major beneficiaries of the increased trade in oilseeds and
products in 1997/98 are the United States, where soybean exports
are expected to reach 25.8 million tons (up 8 percent), and
Argentina (with soybean exports to increase 100 percent to 1.5
million tons).  China is anticipated to remain a large net
importer of soybeans and soybean meal.

World trade in protein meals is expected to reach a high of 51.3
million metric tons in 1997/98.  The gains in protein trade are
expected to be made by: the United States with 6.7 million tons
of soybean meal exports (up 4 percent from last year); Argentina
with 9.15 million tons (up 6 percent); and India with 3.0 million
tons (up 20 percent).

Global vegetable oil trade in 1997/98 is projected to be 28.1
million tons. Soybean oil will constitute 6.2 million tons of
this trade, up from 5.9 million in 1996/97.  World exports of
palm oil will grow more slowly.

Higher Acreage Boosts U.S Sunflower Production Despite Lower
Yields

Delays in planting, a dry summer, and severe midge infestations
have trimmed 1997 sunflower yields.  Average U.S. sunflowerseed
yields fell to 1,334 pounds per acre from 1,435 pounds last year. 
Production increased 159 million pounds to 3,745 million, on the
strength of 300,000 more acres harvested.  In North Dakota, 21
percent of sunflower acreage had been harvested by October 5,
compared to the 5-percent average for that date. 

While domestic crush is expected to stagnate because of greater
competition from other sources in the sunflowerseed oil market,
the domestic non-oil use of sunflowerseed continues to expand. 
Yearending sunflowerseed stocks are not expected to change much
from the 433 million pounds carried out from 1996/97.  The U.S.
export market for sunflowerseed oil faces larger supplies from
Argentina, the EU, and Ukraine.  Little change is expected for
the U.S. sunflower meal market, except for a lower average price
pressured by much higher soybean meal supplies.

Note to readers: ERS is relocating to 1800 M St., N.W., Washington, D.C. 20036. 
The ERS Customer Service telephone number will be 202-694-5050.  The telephone
number for the ERS Autofax system, which distributes this report and other
oilseed tables, will change at the end of October.  The new number is
202-694-5700.

The next Oil Crops Outlook is scheduled for release at 4:00 pm ET Wednesday,
November 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  residual        stocks
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         -------------------------- Million bushels---------------------------

1995/96     335    4    2,177    2,516     1,370    851    112    2,333    183
1996/97 1/  183   10    2,382    2,576     1,436    882    126    2,444    132
1997/98 2/  132    5    2,722    2,859     1,495    960    133    2,589    270
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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      1/                   ports           stocks
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         ---------------------------1,000 short tons--------------------------

1995/96     223     32,527    32,825       26,611   6,002   32,613    212
1996/97 2/  212     34,200    34,515       27,165   7,100   34,265    250
1997/98 3/  250     35,475    35,850       28,200   7,400   35,600    250
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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---------------------------

1995/96     1,137   15,240   16,472       13,465     992   14,457   2,015
1996/97 2/  2,015   15,745   17,815       14,215   2,050   16,265   1,550
1997/98 3/  1,550   16,670   18,280       14,325   2,400   16,725   1,555
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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
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              $/bu.   $/ton   $/cwt   Cents/lb  $/bu.

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        6.77  106.00    11.50    29.30   5.19
1996/97 1      7.38  125.00    11.80    28.50   6.21

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
March          7.97   NA       12.20     NA     6.66
April          8.23   NA       12.40     NA     6.49
May            8.40   NA       12.10     NA     6.50
June           8.16   NA       11.90     NA     6.03
July           7.53   NA       10.70     NA     6.07
August         7.25  112.00    10.70     NA     5.53

1997/98
September 1    7.02  113.00    10.60    27.40   5.76
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1 Preliminary.  NA = Not available

Table 5--Vegetable oil prices
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                      Cotton-  Sun-       
Marketing    Soybean   seed   flower Peanut  Corn  
 year          oil 2    oil 3   oil 4 oil 5    oil 6 
---------------------------------------------------
                     Cents/lb.

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  40.30  25.55 
1996/97 1     22.50    25.58   22.65  43.70  24.13 
                                                   
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         23.29    26.18   22.70  44.75  24.38
April         23.17    25.10   23.50  45.00  24.60
May           23.68    25.19   23.20  46.20  24.66
June          22.97    25.01   22.33  47.88  24.82
July          21.89    26.53   21.73  48.06  25.34
August        22.06    27.11   22.02  48.00  25.36
September 1   22.88    28.03   22.95  47.25  25.15
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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        meal 2  meal 3  meal 4  meal 5  meal 4
---------------------------------------------------
                        $/Short ton
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  190.92  159.05
1996/97 1   270.90  192.00  110.75  235.00  159.25

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
March       280.50  189.10  121.70  225.00  163.30
April       288.60  197.25  124.00  233.75  168.00
May         306.40  193.75  120.00  222.00  188.30
June        287.90  188.44  106.25  235.00  171.25
July        273.60  170.75   84.00  220.00  124.00
August      273.30  176.25   85.00  213.00  126.25
September 1 278.30  191.25   91.50  210.00  136.00
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1 Preliminary. 2 Hi-pro Decatur. 3 41% Memphis. 4 Minneapolis. 5 50% SE mills.

END_OF_FILE