Excerpts from the review:

PRICE MONITORING. According to the departmental monitoring of the Ministry of Agriculture of Russia, the average price for sunflower seeds and sunflower meal from August 19 to 26 in the Russian Federation decreased by 0.4% and 0.3%, respectively. The cost of soybeans and sunflower oil remained unchanged. Rape seeds rose in price by 2.0%.

At the same time, compared with the indicators for the corresponding date of last year, the average price of rapeseed increased by 29.5%, sunflower – by 18.5% and soybeans – by 9.0%. The cost of sunflower oil and sunflower meal rose by 10.2% and 2.6%, respectively.

In September, the main impact on domestic prices, as noted in the “Center for Agroanalytics”, will have the entry of oilseeds on the market of the 2020 harvest, as well as changes in expectations of the size of the new crop in Russia and the world. An improved outlook for 2020 gross harvest will help lower prices, and a worsening one will support them. In addition, an important factor will be the dynamics of the ruble against the dollar.

CLEANING CAMPAIGN. According to the operational data of the Ministry of Agriculture of Russia, rapeseed by August 28 was harvested from 480.0 thousand hectares, or 30.8% of the cultivated area (287.1 thousand hectares in 2019), more than 1.06 million tons (643.1 thousand tons on the same date last year) with an average yield of 23.1 c / ha (22.4 c / ha).

Sunflower harvesting started at a faster pace than last year, and soybeans at a slower pace. Sunflower was threshed on 241.9 thousand hectares, or 2.9% of the sown area (80.5 thousand hectares in 2019), 355.9 thousand tons (184.1 thousand tons) were threshed with a yield of 14.7 centners / ha (22.8 c / ha from a comparable area in 2019).

Soybeans were threshed on 40.7 thousand hectares, or 1.4% of the sown area (131.8 thousand hectares), 70.2 thousand tons (252.0 thousand tons) were threshed with a yield of 17.3 c / ha (17.0 c / ha from a comparable area in 2019).

PROCESSING. According to Rosstat, the production of sunflower oil in July for the first time in the 2019/20 season fell below last year’s level, amounting to 375 thousand tons (-3.2% to the level of the previous year). The volume of oil shipments from enterprises also decreased – almost 209 thousand tons (-18.5%).

As a result, according to the “Center of Agroanalytics”, the remaining sunflower oil rose to a record level since January 2010 and amounted to more than 555 thousand tons by August 1 (+ 54.2%). In general, almost 5.57 million tons of sunflower oil were produced in September – July 2019/20 agricultural year (+ 20.7% over the same period of the previous season).

The volume of production of unrefined soybean oil in July increased by 3.8% against the level of June, exceeding the indicator of the last year by 6.5% and amounted to 61.9 thousand tons.In general, almost 696 thousand tons of soybean oil were produced in September-July (-1.5% to the indicator for the same period last season).

The production of unrefined rapeseed oil in July also increased against the level of June (+ 4.0%) and exceeded the indicator of the last year (+ 25.8%), amounting to 46.1 thousand tons. In general, in September-July, more than 543 thousand tons of rapeseed oil (+ 10.2% to the level of the previous season). The volumes of production and shipment of meal and cake decreased to the level of June, but exceeded the indicator of the previous year.

In July, 695 thousand tons of meals and cakes were received (-6.6% to the level of June and + 1.4% to the level of the last year). In general, in September – July, about 9.12 million tons of oil meals and cakes were produced (+ 9.4% to the level of the previous season).

INTERNATIONAL TRADE. According to preliminary data from the Federal Customs Service of Russia, from 17 to 23 August 31.7 thousand tons of sunflower oil were exported from the country (43.9% less than the average level for four weeks).

The main directions for the supply of these products were Sudan (8.0 thousand tons, or 25.2% of exports per week), India (4.1 thousand tons, or 12.9%) and China (4.0 thousand tons, or 12.7%). Of the 18.1 thousand tons of soybeans exported during the week, almost 15.1 thousand tons were delivered to China. During the same period, 6.4 thousand tons of sunflower meal, 4.5 thousand tons of rapeseed oil, 2.8 thousand tons of soybean oil and the same amount of soybean meal and 5.3 thousand tons of rapeseed were shipped abroad. Since the beginning of the 2019/20 season, the largest volume of exports of oilseeds and their processing products from Russia fell on sunflower oil – more than 3.42 million tons (+ 33.0% to the level of the last season).

Sunflower seeds remain the leader in relative and absolute growth in exports since the beginning of the season, as noted in the Agroanalytics Center: their supplies amounted to over 1.23 million tons (3.5 times more than a year earlier). The export volume of soybeans amounted to about 1.22 million tons (+ 53.3%).

The supply of flax seeds abroad also significantly increased – to more than 511 thousand tons (+ 20.4%). Export shipments of sunflower meal exceeded 1.97 million tons (+ 28.3%), rapeseed oil – 638 thousand tons (+ 10.1%), soybean oil – amounted to 610.5 thousand tons (+ 9.4%) , soybean meal – more than 530 thousand tons (+ 46.7%). Only the volume of accumulated export of rapeseed remains noticeably lower than in the 2018/19 season – about 369 thousand tons (-28.3%).

Since the beginning of the 2019/20 season, imports of soybeans have exceeded 2.0 million tons (-1.6% compared to the previous season), while imports of soybean meal exceeded 194 thousand tons (+ 34.3%). Palm oil imports decreased to 1.01 million tons (-3.4%).

WORLD MARKET. From 21 to 28 August, the strengthening of oil quotations (+ 2.5%) against the backdrop of a gradual recovery in industrial production in the world and a decrease in the supply of oil supported world oil prices. The rise in prices for vegetable oils and meal is facilitated by the recovery in demand for oil as the world economy escapes from the restrictive measures introduced against the backdrop of the COVID-19 pandemic.

Due to the hot and dry weather in the Black Sea region, analysts are downgrading forecasts for the sunflower harvest. The most significant increase in prices for Bulgarian sunflower seeds (+ 9.2%) from 21 to 28 August. Ukrainian sunflower oil rose in price by 6.0%, to the maximum since the beginning of the 2019/20 season – 845 USD / t. Soybean futures in Chicago climbed to a seven-month high amid dry weather in US soybean producing regions.

The upward pressure on the price of soybeans is also being exerted by increased purchases by China to build up reserves amid continuing strained relations with the United States. In the reporting period, soybean prices in the United States, Brazil and Argentina increased by 5.0%, 4.1% and 4.0%, respectively. For the week of August 23-30, the state of soybean crops in the United States deteriorated, but remains much better than last year. The share of crops in good and excellent condition is 69% (-3 pp versus the previous week and +11 pp versus the previous year).

According to the results of a large-scale field study of the state of soybeans in the seven main states of the United States, the gross harvest of soybeans in this country in 2020 is expected to be the third largest in history and will amount to 118.7 million tons (120.4 million tons – USDA August forecast, 96 , 7 million tons last year).

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