October 7, 2019
According to the September USDA Farm Service Agency crop acreage report, area planted to sunflower in 2019 increased 3% from 2018 and totals 1.33 million acres.
Planted area of oil-type varieties, at 1.18 million acres, is up 1% from 2018. Planted acreage of non-oil varieties, estimated at 154,800 acres, is up 13% from last year.
Using a trend yield, initial estimates peg the U.S. sunflower crop at about 1 million metric tons (MMT), which compares to last year’s total of 960,000 metric tons (MT). If realized, this level of production will create tight ending stocks at the end of the 2019-20 marketing year. USDA will release its final acreage and production estimates in January.
Global sunflower production in 2019-20 is projected at 52.6 MMT. This figure is up about 1.2 MMT from last year. The increase is mainly because of a larger crop in Russia and Ukraine. Argentina and European Union production is expected to be unchanged from last year.
Global crush is projected to increase based on the higher production figure. Sunflower oil trade is forecast to rise, supported by strong demand in India, the European Union, North Africa and the Middle East. Ending seed stocks are expected to stay relatively low, representing only 5.4% of annual usage.
Initial yield reports from late September are positive, and quality is generally very good. Most of the U.S. crop is rated in the good-to-excellent categories, so yields and quality are expected to be above average.
Depending on the size of 2019 crop, seed prices could drift lower as harvest deliveries arrive at plants and farmers pick up the selling pace in the next couple of months. After the initial harvest delivery period, prices will follow demand news.
With harvest in progress in Northern Hemisphere countries, the market is beginning to look at 2020 production prospects in the Southern Hemisphere. Farmers in both Brazil and Argentina are talking about a significant increase in 2020 soybean acres.
The U.S.-China trade war is offering opportunity for these countries to fill the void of U.S. soybean exports to China. If realized, this could put pressure on U.S. new crop oilseed prices this fall into winter.
U.S. producers also are looking at crop options for 2020, and crush plants are expected to be out early, offering new crop NuSun and high oleic contracts that have cash or Act of God production clauses. They will want to regain the acreage lost in previous years, so new crop sunflower prices are expected to be competitive in relation to other crops.
Something else to keep in mind is oil premiums that are paid on sunflower. Oil premiums are offered at the crush plants on oil content above 40% at a rate of 2% price premium for each 1% of oil above 40%. For example, 45% oil content results in a 10% price premium, which pushes gross returns from oil sunflower even higher.
You can find market news and prices at sunflowernsa.com.
Sandbakken is the executive director of the National Sunflower Association.
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