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December 20, 2023
Oil World, a global market analyst in Hamburg, Germany, is forecasting global sunflower seed production for 2023-24 at 56.7 million metric tons, up 3% from 2022-23. Higher production in Ukraine and Russia is the leading factor for the increase.
Ukrainian and Russian sunflower production estimates remain murky due to the ongoing war, but production is anticipated to be around 8% higher than 2022’s. The European Union, Argentina, Turkey and United States are expected to have decreased production versus last year.
The 2023-24 global sunflower crush is estimated to reach 52.5 MM, which is about equal to last marketing year. Higher crush volumes are expected in Ukraine, Russia and the United States. Global sunflower oil production is expected to remain equal to the last market year at 22.1 MMT.
Oil exports to China, India and many other countries are expected to rebound from reduced levels experienced in the 2022-23 marketing year to more normal quantities. U.S. sunflower oil export supplies have tightened recently and will improve as new-crop supplies move to the crush plants in the coming months.
Ending global sunflower oil stocks are projected to be relatively low at 4.23 MMT by the end of September.
Nearby prices at the crushing plants are facing seed supplies that are currently burdensome. The 2022 crop was huge, and 2023 production looks to be one of the best as well. Crop quality remains very good, and yields have been 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, which is being reflected in the significant price spread between nearby and deferred contracts. Bird food prices have had upward movement in some locations after being somewhat quiet. Warmer-than-normal temperatures with little snow on the East Coast, the primary market for bird food, has slowed demand.
Bird food prices could rally if tougher winter conditions set in. Given the current price scenario, a good strategy may be to leave the seed in the bin for now and look at delivering it down the road.
Once again, 2024 will be another challenging year in terms of marketing commodities. Margins will be tighter, so producers are going to have to buckle down and watch their marketing in the year ahead. They will also have to sharpen their pencils when it comes to figuring the bottom line, as crops that were profitable last year may not be in 2024.
Something else to consider is the oil premiums that crush plants pay on sunflowers. Add on the premium for oil content above 40% at a rate of 2% price premium for each 1% of oil above 40% when making marketing decisions.
In the months ahead, price direction will be determined mainly by export demand news and South American oilseed production prospects. The U.S. dollar continues to stay strong against other currencies, which could lead to a slowdown in exports as importers look for cheaper sources of product. To keep up with price movement and find seed buyers, visit sunflowernsa.com.
Read more about:Sunflowers
Executive director, National Sunflower Association
John Sandbakken of Mandan, N.D., has been the executive director of the National Sunflower Association since 2012. Before his current post, he was NSA's international marketing director for 16 years.
The National Sunflower Association is a combination of United States sunflower growers and industry members. NSA is a nonprofit organization working in the areas of market development, education, production and utilization research.
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