Wednesday's release of the USDA's Foreign Agricultural Service China -- Oilseeds and Products Annual show positive data for global oilseed trade in 2017/18.
Year-over-year increase in soybean production in China is expected to increase by 5.3% in 2017/18 to 13.8 million metric tons (light blue bars), with changes in that country's policy designed to push growers away from corn production and to soybeans. This is well-below the 11.2% year-over-year increase in production achieved in the 2016/17 crop year. Consumption continues to grow (brown bars), with the USDA noting increased demand for meat, eggs, milk, seafood and vegetable oils behind the demand, although the year-over-year growth is slowing. Consumption is estimated at 102.8 mmt, up 2% from 2016/17, well below the 6.1% year-over-year growth estimated for 2016/17 and the 8% growth estimated for 2015/16.
China's soybean imports (grey bars) are estimated to increase by 3.5% in 2017/18 to a record 89 mmt, up from the 3.3% year-over-year increase estimated for the current crop year. This can be viewed as favorable data for the Canadian industry, seen boosting acres in the upcoming crop year while simultaneously poised to increase share into China's market. As of January, Canadian Grain Commission data, 50.4% of Canada's 3.2 mmt of licensed soybean exports were destined for China, as compared to 37.8% of exports attributed to China's demand in the 2015/16 crop year over the same period.
The USDA's report signals challenges in China enticing growers to produce canola/rapeseed given weaker returns generated relative to other cropping options. Canola production is expected to fall 3% in 2017/18 to 13.1 mmt, after falling by 5.6% year-over-year in the current crop year (yellow bars). Domestic consumption is estimated to remain unchanged from 2016/17 levels at 17.8 mmt (blue bars), which remains an anomaly given an estimated increase of 2% estimated for soybean consumption and a 1.8% increase expected for oilseed consumption overall. The green bars represents expected canola imports, which are expected to increase by 4.9% or 200,000 metric tons to 4.3 mmt, still well below the 5.04 mmt imported in 2013/14.
DTN 360 Poll
The current poll asks how you view the spring soil moisture conditions as we enter spring. You can weigh in with your thoughts on this week's poll, which is found at the lower right side of your DTN Home Page. We thank you for your participation!
Cliff Jamieson can be reached at email@example.com
Follow Cliff Jamieson on Twitter @CliffJamieson
© Copyright 2017 DTN/The Progressive Farmer. All rights reserved.