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Soybean and Oilseed Meal Import Prospects Higher as Severe Weather Damages EU Crops
16.08.2018 12:25 "Agro Perspectiva" (Kyiv) —
According to the report of the USDA Oilseeds: World Markets and Trade (August 2018), the 2018/19 oilseeds production forecast for the European Union has been reduced significantly since USDA’s first projections published in May. Although prospects for sunflowerseed have improved, lower rapeseed yields are dragging production below last yeari. Additionally, EU wheat and coarse grains crop projections are cut again this month resulting in expected lower feed grains consumption. Reductions in rapeseed and coarse grain supplies can be offset with higher rapeseed and corn imports; reduced availability of feed-quality wheat may be partially offset with imported soybeans and oilseeds meals. For that reason, 2018/19 soybean and soybean meal import projections are boosted to 15.8 and 18.5 million tons, respectively. Additionally, rapeseed and sunflowerseed meal import forecasts are adjusted higher following improved production prospects for both crops in Ukraine. Meanwhile, the 2017/18 EU soybean import forecast remains unchanged at 14.1 million tons. Lower U.S. soybean prices vis-à-vis Brazil, a result of China’s duties imposed on U.S.-origin soybeans, have contributed to a surge in EU imports from the United States. While China substitutes U.S. soybeans by maximizing purchases from Brazil, the rest of the world is taking advantage of competitively priced U.S. supplies and the improved crush margins that have resulted. The recent shift to U.S. origin is likely to continue as long as crush margins remain attractive. However, it is important to note that the European Union is a mature market with limited capacity to expand. According to industry contacts, oilseeds processors are crushing at or near capacity which limits soybean import growth.
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