OIL CROPS OUTLOOK                                            August 13, 1997
            Approved by the World Agricultural Outlook Board
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OIL CROPS OUTLOOK is a monthly report issued electronically by the  Economic
Research Service, U.S. Department of Agriculture, Washington, DC 20005-4788.
No printed copies available.  OCS-0897.  
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Bumper 1997 Soybean Harvest To Replenish Supplies

Although soybean conditions had declined throughout July, 55 percent of
soybeans nationally are currently rated in good to excellent condition.  The
first objective yield forecast for 1997/98 came in at 39.3 bushels per acre,
up from 37.6 bushels in 1996/97.  Good moisture levels are producing
potentially record high yields in Minnesota, Michigan, and Wisconsin.  In
Indiana and Ohio, this year's earlier start for planting is aiding a rebound
in yields from a much shortened 1996 season.

A period of hot weather in July drew down soil moisture levels throughout the
Midwest.  The driest regions included Missouri, Arkansas, Tennessee, Kentucky,
and western Illinois.  As of August 10, 89 percent of U.S. soybeans had
reached the blooming stage, somewhat ahead of the average pace.  The setting
of pods follows soon after, so that availability of moisture during this
period will be very important for determining yields.  In the last few days, a
widespread and very timely system of showers interrupted the dry spell and
brought relief to many areas.  While this rain may be too late to raise corn
yields much, the benefit to soybeans could be substantial.

Given the large harvested area estimate, even a soybean yield as low as 36
bushels per acre would still have produce a crop equal to the previous 1994
record.  But the August Crop Production estimate of 2,744 million bushels
exceeds that mark by 228 million bushels.  Excellent yields and record acreage
in Iowa, Indiana, Illinois, Ohio, Nebraska, Minnesota, and South Dakota are
leading to record output in each of these key producing States.  A very tight
carryin stock level of 125 million bushels will soon ease as the new harvest
swells total soybean supplies to new heights.  Projected year ending stocks of
soybeans will climb to 305 million bushels, up from last month's forecast of
285 million.  

Prospects for 1997/98 U.S. soybean exports were raised this month to 945
million bushels.  Enlarged supplies and expanding foreign import needs,
particularly in China, Taiwan, Brazil, and Mexico, will allow a record volume
of U.S. exports.  Despite higher production, these strong gains in domestic
and foreign soybean demand reinforce the season average price forecast of
$5.40-$6.60 per bushel.  A smaller than expected corn harvest will also
buttress 1997/98 soybean prices.


A dimmer outlook for China's oilseed production will account for a large share
of growth in U.S. exports of soybean meal and oil.  This will kick up 1997/98
U.S. soybean crush to 1,485 million bushels, which far exceeds this season's
record offtake.  In a reprise of the 1994/95 season, when robust Chinese
demand drove U.S. soybean oil exports to a record 2,680 million pounds,
1997/98 exports (2,150 million pounds) will again benefit from substantial
Chinese imports.  With domestic consumption and exports turning in another
solid year of growth, the average soybean oil price will firm to 21.75-24.75
cents per pound.  This year's U.S. soybean meal exports are expected to total
7.3 million short tons, which would tie the 1986/87 record.  However,
comparatively larger world supplies of protein meals will drop the 1997/98
average soybean meal price to $185-$215 per short ton.

For 1996/97, U.S. soybean exports were forecast down this month to 880 million
bushels.  Export shipments have slowed to a trickle in the last 2 months.  The
ending stocks forecast remained unchanged at 125 million bushels, as an
offsetting reduction in U.S. soybean imports was forecast, to 10 million
bushels.  Year-to-date imports from Canada have been just 36 percent of their
year earlier volume, while shipments from Brazil appear to be smaller than
first anticipated.  Domestic disappearance (14,050 million pounds) and exports
(1,850 million) of soybean oil are both expected higher from the July
forecast.  Stronger oil demand would contract carryout stocks to 1,625 million
pounds.  The 1996/97 average soybean meal price forecast is raised to $265 per
short ton.

World Oilseed Stocks To Rebound in 1997/98 

World production of oilseeds is expected to climb more than 6 percent in
1997/98 to 275.03 million metric tons.  Foreign production is expected to
reach 190.42 million tons, while global trade is expected to increase by 6
percent to 49.76 million tons.  World oilseed stocks are expected to rebound
in 1997/98, reaching 22.71 million tons.  Global stocks would be up 35 percent
from 1996/97, but still below the 1994/95 peak of 27.2 million tons.

World soybean production in 1997/98 is expected to increase by 11 percent
(147.1 million tons), rapeseed production more than 9 percent (33.5 million
tons), and sunflowerseed production more than 2 percent (24.2 million).  The
only significant reduction in global output for any oilseed in 1997/98 is for
peanuts, which are expected down 4 percent to 25.6 million tons.

In South America, record soybean crops are forecast for all the countries in
the region.  Brazilian soybean production for 1997/98 is projected to increase
to 28 million tons, up by more than 5 percent from 1996/97, largely due to a
strong expansion in area planted.  Strong producer income from the previous
harvest and greater access to credit markets will fuel the expansion.  In
Argentina, soybean production is expected to increase to a record 13.9 million
tons as yields recover from this season's prolonged drought.  Exports are
forecast to rebound to only 1.5 million tons as the recently increased
crushing capacity absorbs most of the production.

China's 1997/98 soybean production is expected to remain unchanged from this
year, at 13.5 million tons.  Soybean area did not expand as much as expected
and drought in the north China plain will prevent any year-to-year growth in
yields.  This level of production, however, is not expected to be enough to
cover the booming demand for soybean meal and vegetable oil, increasing
soybean imports to a record 2.7 million tons.  China traditionally has been an
exporter of soybeans, supplying nearby Asian markets, but in just a few years
has become a net importer of soybeans and soybean meal.

Global rapeseed production for 1997/98 is expected to reach 33.4 million tons,
up more than 9 percent from 1996/97 as crops in Canada and the European Union
show a strong recovery.  Poland's rapeseed crop was hurt again this year by
substantial winterkill, but recent flooding is not expected to have much
impact.

Global peanut production for 1997/98 is expected at 25.45 million tons, down
from 26.6 million in 1996/97.  The main reason for the reduction is that
China, the world's largest producer, is expected to harvest only 9 million
tons, down from 10.1 million in 1996/97.  The growing areas of northern and
central China are experiencing the worst drought in the last 40 years.  In
Shangdong province, the crop damage is quite extensive.  India, the second
largest producing country, is expected to maintain year-earlier production
levels in 1997/98 at around 8.0 million tons.  Minor increases in peanut
production are expected in Argentina due to a rebound in yields from the
drought-reduced levels of 1996/97.

World Consumption of Oilmeals and Vegetable Oils Rises in 1997/98

World use of oilmeals in 1997/98 is forecast at 152 million tons, up 2.8
percent from this year.  Global soybean meal consumption is forecast to reach
95.5 million tons, up more than 4 percent from 1996/97, and the second
consecutive annual increase.  Rising global use is attributed to sustained
growth in the demand for soybean meal in Asia (particularly in China), Mexico,
and the United States.

China's soybean meal demand for 1997/98 is expected to reach 10.9 million
tons, more than 9 percent above 1996/97.  This level would increase soybean
meal imports to a record 3.4 million tons, more than 15 percent higher than
1996/97.  In the United States, domestic demand for soybean meal is expected
to rise to 25.5 million metric tons in 1997/98, due to forecast higher hog
numbers, as well as improved profits in the poultry industry.

The continuous global growth in the use of oilmeals for 1997/98 is expected to
boost U.S. soybean meal exports to a record 6.6 million metric tons, up 8
percent from 1996/97.  Brazil is expected to maintain its position as the
single largest exporter of soybean meal with 11.0 million tons, while
Argentina is expected to export 8.9 million tons.

World use of vegetable oils is expected to increase in 1997/98 to 75.4 million
tons, up more than 3 percent from this year.  Global trade is also expected to
increase to 27.4 million tons, up 450,000 from 1996/97.  Chinese soybean oil
imports are forecast up this month to 1.7 million tons.  U.S. soybean oil
exports are expected to reach 975,000 tons.

The next Oil Crops Outlook is scheduled for 4:00 pm ET Monday, September 15.

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     1,425    880    136    2,451    125
1997/98 2/  125    5    2,744    2,874     1,485    945    139    2,569    305
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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
------------------------------------------------------------------------------

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

1995/96     223     32,527    32,825       26,611   6,002   32,613    212
1996/97 2/  212     33,688    34,000       27,100   6,700   33,800    200
1997/98 3/  200     35,325    35,650       28,100   7,300   35,400    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   15,460   17,525       14,050   1,850   15,900   1,625
1997/98 3/  1,625   16,560   18,245       14,300   2,150   16,450   1,795
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1/ Includes imports.  2/ Estimated.  3/ Forecast.


Table 4--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
1995/961       6.77  106.00    11.50    29.30   5.25
1996/971       7.38  125.00    11.85    28.50   6.25

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
July1          7.72   NA       11.50     NA     5.48
--------------------------------------------------------
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.

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 
1996/971      22.60    25.25   22.60  40.60  24.00 
                                                   
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
July1         21.89    26.53   21.73  48.06  25.34
---------------------------------------------------
1 Preliminary 2 Decatur 3 PBSY Greenwood MS
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
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
1996/971    265.00  193.00  117.50  235.00  170.00

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
July1       273.60  172.19   84.00  220.00  124.00
---------------------------------------------------
1 Preliminary 2 Hi-pro Decatur 3 41% Memphis 
4 Minneapolis 5 50% SE mills

END_OF-FILE