In a recent USDA supply-and-demand report, the global sunflower production forecast for marketing year 2023-24 was reduced by 0.5 million metric tons to 55.08 MMT on lower production in the European Union, Russia and Argentina.

The global harvested acreage forecast was lowered by 0.25 million hectares to 27.65 million on lower acreage in Argentina, Russia and the EU. With lower supply, the global sunflower seed export and crush forecasts were also reduced by 0.3 MMT and 0.5 MMT, respectively.

Global sunflower seed ending stocks for MY 2023-24 are forecast to decline to 3.1 MMT, representing a decrease of 23% from last year’s stocks level of 4 MMT.

Earlier this year, USDA updated the MY 2023-24 production estimates for U.S. sunflowers from its October estimate. The final estimate for MY 2023-24 production was raised by 69.1 million pounds to 2.3 billion pounds on higher harvested area and yields.

Sunflower yields were forecast at 1,786 pounds per acre, nearly 2% higher than yields in MY 2022-23. Production for oil-type varieties was raised 2% to 1.97 billion pounds. The non-oil-type varieties increased 33.5 million pounds to 297 million pounds on higher yields.

USDA expects the higher total sunflower seed supply to result in additional non-oil use. Given ample seed supplies, sunflower crush is expected to be comparable to MY 2022-23. Sunflower seed ending stocks for MY 2023-24 are projected to be 286.4 million pounds, 80 million pounds below ending stocks for MY 2022-23.

This was welcome news in the U.S. sunflower market after dealing with burdensome stocks for the past year. USDA is forecasting the season-average farm price for sunflowers at $19.50 per cwt.

Prices to be competitive

New-crop prices remain competitive, while the battle for acres continues. All sunflower demand sectors are offering Act of God contracts for fall delivery. These “fail safe” contracts have become very popular with farmers throughout the production region. It provides an opportunity to lock in attractive prices now for fall delivery and removes that all important factor of price risk in these volatile times.

Something else to consider is the oil premiums that crush plants pay on NuSun and high-oleic sunflower contracts. Sunflower is the only oilseed that pays premiums for oil content above 40%. Crush plants offer premiums on oil content above 40% at a rate of 2% for each 1% of oil above 40%. This pushes a contract with 45% oil content gross return 10% higher per cwt and would raise the value of a $19.50 base contract close to $21.45 per cwt.

The main market mover from April onward will be USDA’s March Prospective Plantings report. Trade expectations about planted acreage will likely be in a wide range before the report is released. After the release of the report, North American weather conditions and 2024 U.S. oilseed crop prospects will progressively become a more important factor in price. To keep up with price movement, visit sunflowernsa.com.