Nearby prices at the crushing plants continue to face pressure from seed supplies that are burdensome. The 2022 crop was huge, and 2023 production was one of the best as well. Crop quality remains very good, and yields were above expectations in most cases.

Supplies are big despite fewer planted sunflower acres in 2023. The crushers need time to use up the ample seed supply, and this is being reflected in the major price spread between nearby and deferred contracts.

Based on this information, will sunflower acres decrease this year? I wish there was a crystal ball to predict this, but as you know, there isn’t. From the chatter I am hearing from both producers and processers that are contracting acres, I would say oil-type acres will have a substantial decrease, with confection acres staying about the same as last year.

Crushing plants are still offering new-crop cash and Act of God production contracts. AOG clauses basically mean the producer doesn’t have a production risk. Should drought, hail, insects, disease, etc., result in a yield loss and production per acre can’t cover a sale, the AOG clause kicks in.

You are only obligated to deliver what you produced — not what you contracted. Keep in mind that oils also receive a 2% price premium for each 1% of oil content that is over 40%. This pushes a contract with 45% oil content gross return 10% higher per cwt. This would raise the value of a $19.75 base contract to $21.75 per cwt.

Push for high-oleic oil

Something else that you will see in 2024 is the continued push toward converting the oil crop from NuSun to high-oleic sunflower. There is a market for both oils. However, trends change, and products need to adapt to consumer preferences.

The market wants oils to have zero trans-fat and saturated fat levels at or below 7%. In addition, food processors want oils to be very stable for extended shelf life and fry life, coupled with a neutral taste profile. High-oleic sunflower oil fits the bill on all counts.

While NuSun was a positive move for the sunflower industry in the late 1990s, the increasing market demand for high-oleic oils has convinced oil crushers that the industry needs to adjust again.

Most fundamental news for oil has been negative the past few months, putting Chicago Board of Trade soybean oil contracts on the defensive. Market analysts think this trend will reverse into the spring and summer, with oil prices strengthening as meal demand tapers off.

Historically, old-crop sunflower seed prices hit the market high in June to July, and this could happen again this year depending on planted acres and growing-season conditions.

In the months ahead, growing-season weather from North America to the Black Sea region will be the main price-setter. Other fundamentals that the markets will be focusing on will be South American corn and soybean production’s impact on U.S. exports, plus any news from Washington on trade policy.

To keep up with price movement, you can go to sunflowernsa.com.

Sandbakken is executive director of the National Sunflower Association, and writes from Manda, N.D.