OIL CROPS OUTLOOK                                         June 14, 1999
June 1999, OCS-0699
              Approved by the World Agricultural Outlook Board
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OIL CROPS OUTLOOK is issued 11 times a year by the Economic Research
Service, U.S. Department of Agriculture, Washington, DC 20036-5831. 
Electronic release only; no published copies are available.

OIL CROPS OUTLOOK is supplemented by an annual OIL CROPS YEARBOOK.  The
yearbook summary for 1999 will be released on October 22, 1999.  Yearbooks
are available in print from ERS-NASS Order Desk. For the 1999 issue, call
1-800-999-6779 (703-605-6220) and ask for stock #ERS-OCS-1999, $21.
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U.S. Soybean Planting Advances Despite a Wet Spring

Weather in the eastern Corn Belt was generally dry in May, aiding
planting progress and crop emergence.  By the first week of June,
U.S. producers had planted 84 percent of soybeans, compared to
the 5-year average of 71 percent.  Conversely, in the western
Corn Belt, farmers struggled more to get crops planted in between
rain events in May, but had mostly caught up by month's end. 
Except in the Southeast, current soil conditions indicate ample
moisture for establishing good stands of soybeans.

The same weather patterns have affected other oilseeds as well,
with excess moisture in North Dakota slowing sunflower and canola
planting.  Difficulties in planting spring wheat may further
expand acreage planted to minor oilseeds.  Dryness in Georgia is
deteriorating the early condition of peanuts.

Within the next 3 months, 9-month loans for about 200 million
bushels of soybeans will mature.  In the absence of significant
weather problems this summer, the lapse of these loans will exert
even greater pressure on near term cash prices as farmers market
these remaining supplies.  The 1998/99 average farm price for
soybeans is expected to slide to $5.00 per bushel.  Subsequent
weather will determine whether soybean prices have yet found a
bottom.  If normal weather prevails, 1999/2000 prices are
projected at $3.95-$4.75 per bushel.  Low U.S. prices, the
smaller South American harvests and accelerated export pace
compared to a year ago, and an improving world economy set the
stage for a dynamic U.S. export performance next fall.  American
soybean exports are forecast to improve from 770 million bushels
this year to 930 million in 1999/2000.

Domestic soybean crushing has defied low margins lately by
remaining at a relatively steady pace.  Concessional sales of
soybean meal to Russia helped sustain the U.S. market in May. 
But with Brazilian and Argentine crush reaching record highs, and
Southeast Asian palm oil output soaring again, domestic
processors may find their respite from intense competition
temporary.  EU imports of soybean meal have been very strong, but
these are almost an exclusive market for South American
processors right now.  U.S. 1998/99 exports of soybean meal were
forecast lower this month to 6.7 million short tons, but should
rebound  next year to around 8.2 million tons.  Historically low
prices have stabilized growth in domestic soybean meal
disappearance, which is expected to total 30.1 million tons this
year and slow to 30.7 million in 1999/2000.

Export potential for U.S. soybean oil was downgraded for the
current season because of increasing global competition from palm
oil.  Current export commitments are down one-third from the
level of a year ago.  Projected U.S. 1998/99 soybean oil exports
were scaled back 150 million pounds to 2,300 million.  The
competition will carry over into the 1999/2000 marketing year, so
U.S. exports were projected down from 2,300 million pounds to
2,000 million.  Domestic disappearance should climb to 15,400
million pounds this season, and rise modestly to 15,750 million
in 1999/2000.  Total soybean oil demand would be just 50 million
pounds higher in 1999/2000, swelling carryout stocks to nearly 2
billion pounds from 1.3 billion this year.  The excess of soybean
and soybean oil supplies will drive U.S. oil prices even lower,
to 16.5-19.5 cents per pound, compared to the anticipated 1998/99
average of 20.25 cents.  The central Illinois soybean oil price
fell to an average 17.9 cents per pound in May, the lowest since
1987.

Brisk South American Export Pace Develops

Drier weather in the last 2-3 weeks has helped the Argentine
soybean harvest to stagger toward completion.  Despite a
promising start, adverse late season weather lowered the estimate
of Argentina's 1998/99 soybean production to 18.3 million metric
tons from 18.5 million last month.  This change would also trim
Argentina's end of September soybean stocks to 6.2 million tons. 
The ill-timed rains have also been detrimental to cottonseed and
peanut yields.  Similar weather problems curtailed Paraguay's
soybean harvest to 3.1 million tons, reducing the country's
expected crush 100,000 tons to 0.5 million.

Brazil's 1997/98 soybean crop was revised up 1 million tons this
month to 32.5 million.  The robust crushing rate this year
suggested that there were more available supplies, either from
the domestic harvest or from imports.  To compensate for the
change, Brazil's imports for 1997/98 and 1998/99 were cut back to
a more typical level.  The 1998/99 harvest forecast stayed
unchanged at 31.0 million tons.  But prospects for Brazilian
soybean exports and crushing were diminished by expectations for
larger Indian soybean meal trade.  Projected Brazilian soybean
and soybean meal exports for 1998/99 were cut to 9.5 million and
10.8 million tons, respectively.  September 30 soybean stocks
would creep higher to 5.5 million tons.

India's soybean crop this year was adjusted up to 6.0 million
tons from the previous forecast of 5.5 million.  Consequently,
larger Indian soybean meal exports of 3.1 million tons were
expected and domestic consumption was raised even with last
year's 1.2 million tons.

Sluggish soybean meal imports continue to characterize China's
market.  A fundamental change in policy and a slowing in
consumption by livestock have precipitated a sharp falloff in
meal imports, from 4.2 million tons in 1997/98 to the current
1998/99 forecast of 2.5 million.

Rebound in World Palm Oil Production Stimulates Surge in Demand

While above last year, global 1998/99 soybean oil exports are
forecast lower this month to 7.3 million tons based on a vigorous
recovery in palm oil production.  Projected 1998/99 Malaysian
palm oil output was increased 0.4 million tons to 9.3 million,
adding 0.3 million tons to exports (for a total of 7.8 million). 
The plunge in Malaysian palm oil prices since last December has
snowballed with fears of importers defaulting or deferring new
shipments.  Likewise, Indonesian production gains and another
reduction in the export tax on crude palm oil from 40 to 30
percent adds to the price pressures.

A large portion of the gains in palm oil trade is seen going to
India, where even small price shifts can cause a substantial
change in consumption.  Lower world prices, smaller estimates of
domestic rapeseed oil and peanut oil supplies, and last August's
reduction in oil import tariffs have favored Indian palm oil
consumption.  Indian palm oil imports were forecast up to a
record 1.9 million tons.  While domestic output of soybean oil
has been robust, Indian imports are also doing well, with
October-April trade at 248,000 tons, compared to zero last year. 
Indian consumption of all vegetable oils this year is expected up
17 percent from 1997/98.

A pickup in U.S. palm oil buying also contributed to a higher
1998/99 import forecast to 130,000 metric tons, slightly above
the 1997/98 total.  Other major importers, including China,
Pakistan, and Bangladesh, are expected to take advantage of lower
palm oil prices and increase consumption and imports.  China has
been absent from this rally to date.  The government is
attempting to promote domestic oilseed crushing, and has delayed
deciding import quotas for vegetable oils this year.  The newly
harvested rapeseed crop could extend this import lull for a bit
longer.  But when oil imports are eventually licensed, it is
likely that relatively more palm oil will be bought.

Pakistan reacted to falling vegetable oil prices by raising
import duties by two-thirds on soybean oil and palm oil.  This
action is intended to raise government revenue and protect
domestic oilseed producers and processors.  As a result,
Pakistan's 1998/99 soybean oil imports were expected to slow
somewhat, reducing this month's forecast to 255,000 tons from
275,000 tons.  The competition with palm oil trimmed the
Bangladesh soybean oil import forecast to 300,000 tons, although
this would still top last year's 260,000-ton import volume. 


The next release of the Oil Crops Outlook is scheduled at 4:00
p.m. ET Tuesday, July 13, 1999.  The report may be accessed at
http://usda.mannlib.cornell.edu/ or via the ERS website at
http://www.econ.ag.gov.

Information Contacts:
Mark Ash--Soybeans, minor oilseeds, oils   (202) 694-5289    
mash@econ.ag.gov
Robert Skinner--Cottonseed, peanuts        (202) 694-5313 
skinner@econ.ag.gov

Table 1--Soybeans:  U.S. supply and disappearance
---------------------------------------------------------------------------
                   Supply                          Disappearance 
        ------------------------------   ----------------------------------
Year                                                     Seed,  
begin.    Beg.  Im-   Produc-   Total     Crush   Ex-    feed,   Total  
End.
Sept. 1  stocks ports  tion                      ports  residual       
stocks
---------------------------------------------------------------------------
-------------------------- Million bushels ---------------------------

1997/98  132    5    2,689    2,826   1,597    870    158    2,626    200
1998/99 2/ 200  6    2,757    2,963   1,560    770    203    2,533    430
1999/00 2/ 430  5    2,880    3,315   1,635    930    155    2,720    595
---------------------------------------------------------------------------
1/ Estimated.  2/ Forecast.

Table 2--Soybean meal:  U.S. supply and disappearance
---------------------------------------------------------------------------
               Supply                           Disappearance 
-------------------------------- ------------------------------------
Year 
begin.      Beg.   Im-   Produc-   Total    Domestic   Ex-     Total   
End.Oct. 1 stocks  ports   tion                        ports   stocks
---------------------------------------------------------------------------

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

1997/98    210    56    38,171    38,437     28,889   9,330   38,219    218
1998/992/  218    50    36,807    37,075     30,100   6,700   36,800    275
1999/00 2/ 275    50    38,825    39,150     30,700   8,200   38,900    250
---------------------------------------------------------------------------
1/ Estimated.  2/ Forecast.


Table 3--Soybean oil:  U.S. supply and disappearance
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                     Supply                         Disappearance 
       -----------------------------     --------------------------------
Year 
begin.       Beg.   Im-  Produc-   Total     Domestic  Ex-     Total    
EndOct. 1   stocks  ports  tion                        ports   stocks
--------------------------------------------------------------------------- 
       -------------------------- Million pounds---------------------------

1997/98   1,520   60   18,143   19,724     15,264   3,077   18,341   1,382
1998/99 2/1,382   63   17,550   18,995     15,400   2,300   17,700   1,295
1999/00 2/1,295   55   18,395   19,745     15,750   2,000   17,750   1,995
---------------------------------------------------------------------------
1/ Estimated.  2/ Forecast.

Table 4--Cottonseed:  U.S. supply and disappearance
---------------------------------------------------------------------------
                   Supply                          Disappearance 
    -------------------------------- ------------------------------------
Year                                                             
begin.     Beg.   Im-   Produc-  Total     Crush   Ex-   Other   Total  
End.Aug.1 stocks  ports   tion                     ports         stocks
--------------------------------------------------------------------------  
      -------------------------- 1,000 Short tons--------------------------

1997/98  523   96    6,935    7,553     3,885    149   2,957   6,990    563
1998/99 2/563 155    5,497    6,215     2,800     65   3,100   5,965    250
1999/00 2/250  15    6,955    7,220     3,350    130   3,165   6,645    575
---------------------------------------------------------------------------
1/ Estimated.  2/ Forecast.


Table 5--Cottonseed meal:  U.S. supply and disappearance
---------------------------------------------------------------------------
                     Supply                           Disappearance 
      -------------------------------- -----------------------------------
Year 
begin.      Beg.   Im-   Produc-   Total    Domestic   Ex-     Total   
End. Oct. 1 stocks ports   tion                        ports   stocks
---------------------------------------------------------------------------

      -------------------------1,000 Short tons---------------------------

1997/98      26     0     1,767    1,793     1,596     109     1,705     88
1998/99 2/   88     0     1,260    1,348     1,280      45     1,325     23
1999/00 2/   23     0     1,510    1,533     1,425      70     1,495     38
---------------------------------------------------------------------------
1/ Estimated.  2/ Forecast.

Table 6--Cottonseed oil:  U.S. supply and disappearance
---------------------------------------------------------------------------
                     Supply                         Disappearance 
        -----------------------------     --------------------------------
Year 
begin.     Beg.   Im-  Produc-   Total     Domestic  Ex-     Total     
End.Oct. 1 stocks ports  tion                        ports   stocks
--------------------------------------------------------------------------- 
      -------------------------- Million pounds---------------------------

1997/98     66   0.1   1,223    1,289      1,003     208    1,211      79
1998/99 2/  79  66.4     895    1,040        865     110      975      65
1999/00 2/  65  10.3   1,070    1,145        950     125    1,075      70
---------------------------------------------------------------------------
1/ Estimated.  2/ Forecast.

Table 7--Peanuts:  U.S. supply and disappearance
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                     Supply                         Disappearance         
-------------------------  ----------------------------------------
Year 
begin.     Beg.   Im-  Produc- Total  Dom.   Crush  Seed&  Ex-  Total    
End.Oct. 1 stocks ports tion          Food         resid. ports stocks
---------------------------------------------------------------------------

         ----------------------- Million pounds---------------------------

1997/98    795  141  3,539  4,475   2,099  544   303   681    3,627     848
1998/99 2/ 848  152  3,963  4,964   2,150  630   334   600    3,714   1,250
1999/00 2/1,250 165  3,770  5,185   2,180  830   326   750    4,085   1,100
---------------------------------------------------------------------------
1/ Estimated.  2/ Forecast.

Table 8--Oilseeds prices received by farmers, U.S.
--------------------------------------------------------
Marketing      Soy-  Cotton-  Sun- 
 year         beans   seed   flowers  Peanuts  Flaxseed
--------------------------------------------------------
              $/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        6.72  106.00    11.50    29.30   5.19
1996/97        7.35  126.00    11.70    28.10   6.37
1997/98        6.47  121.00    11.60    28.30   5.81

1997/98
September      6.72  115.00    11.20    29.70   5.73
October        6.49  119.00    10.60    27.90   5.78
November       6.86  124.00    11.10    25.00   5.71
December       6.72  122.00    11.10    26.90   5.72
January        6.69  121.00    11.10    30.70   5.82
February       6.57  107.00    11.80     NA     6.27
March          6.40   NA       12.10     NA     6.26
April          6.26   NA       12.70     NA     6.23
May            6.26   NA       13.80     NA     6.33
June           6.16   NA       14.40     NA     6.17
July           6.14   NA       15.80     NA     6.17
August         5.43  113.00    14.40     NA     5.45

1998/99
September      5.25  113.00    11.40    26.80   5.09
October        5.18  120.00    10.70    26.30   4.86
November       5.40  133.00    10.50    21.50   4.97
December       5.37  138.00    10.80    24.00   5.01
January        5.32  139.00    11.40    25.50   5.06
February       4.80  141.00    12.20      NA    5.05
March          4.61    NA      10.70      NA    4.95
April          4.63    NA       9.44      NA    4.94
May 1/            4.46    NA       9.51      NA    4.74
--------------------------------------------------------
1/ Preliminary.  NA = Not available.

Table 9--Vegetable oil prices
---------------------------------------------------
                      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  25.24 
1996/97       22.50    25.58   22.64  43.70  24.05 
1997/98       25.80    28.85   27.00  49.00  28.94
                                                   
1997/98
October       24.31    28.47   24.51  49.63  25.20
November      25.73    29.11   26.41  51.00  26.25
December      25.08    26.78   26.36  51.25  26.28
January       25.09    27.69   25.75  51.60  26.04
February      26.51    29.37   25.91  51.00  27.31
March         27.09    30.46   26.51  51.00  28.50
April         28.10    32.47   28.50  50.00  30.93
May           28.28    33.13   31.06  47.20  33.20
June          25.83    30.22   28.40  45.50  32.82
July          24.88    29.40    NA    44.00  31.52
August        23.99    30.11    NA    43.75  29.93
September     25.13    33.26    NA    43.88  29.25

1998/99
October       25.21    33.99   NA     45.40  29.46
November      25.20    34.16   NA     45.00  29.65
December      23.99    33.40  26.70   44.25  29.88
January       22.88    31.72  23.41   44.00  29.15
February      19.96    28.21  19.86   39.75  26.58
March         18.54    26.27  19.11   34.75  23.01
April         18.78    24.39  19.60   35.20  23.08
May 1/        17.85    24.25  19.90   35.00  22.96
------------------------------------------------------
1/ Preliminary 2/ Decatur 3/ PBSY Greenwood MS
4/ Minneapolis 5/ Southeast mills 6/ Chicago

Table 10--Oilseed meal prices
---------------------------------------------------
             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  202.70  159.00
1996/97     262.00  192.00  110.60  232.00  158.75
1997/98     185.30  144.05   84.20  209.60  110.00

1997/98
October     229.30  189.10   96.90  210.00  140.60
November    245.30  189.10   88.10  210.00  161.25
December    222.50  190.50  100.00  210.00  150.50
January     202.85  153.10   90.00  210.00  130.00
February    192.75  139.10   75.87  210.00  121.25
March       174.20  128.70   72.60  210.00  116.25
April       162.50  116.25   64.90  210.00  102.50
May         160.00  105.00   66.90  210.00   96.25
June        168.55  126.00   88.35  210.00  100.00
July        183.40  145.65   97.50  210.00  117.50
August      146.25  130.30   85.00  207.50  101.00
September   135.80  115.60    NA    205.00   90.00

1998/99
October     135.70  106.50   50.00  161.00   83.75
November    144.45  107.90   50.00  100.00   92.50
December    146.40  119.75   80.90  103.75  102.50
January     138.80  110.60   77.50  105.00   95.00
February    132.30  101.25   73.75  102.50   87.25
March       133.00  106.90   70.00   91.25   83.00
April       134.50  110.90   70.00   94.50   82.50
May 1/      133.20  108.75   67.50   93.75   80.60
-----------------------------------------------------------------------
1/ Preliminary 2/ Hi-pro Decatur 3/ 41% Memphis 4/ Minneapolis
5/ 50% SE mills

END_OF_FILE