U.S. demand for trans-fat-free NuSun and high-oleic sunflower oils has experienced impressive growth in the past six years. Usage has increased from 436 million pounds to 725 million pounds, a 66% increase.

In the 2022-23 marketing year, domestic usage is expected to continue this growth trend and reach a record 750 million pounds. Based on trend-line projections, domestic sunflower oil consumption is expected to grow 5% to 10% annually.

Of all sunflower oil produced in the United States, 85% is sold into the domestic market. The remaining 15% is primarily exported to Canada, Mexico and Japan. Canada has been the leading export destination at 70% of all U.S. sunflower oil exports.

The market for oil-type seeds has been active since harvest, with crushers and bird food buyers competing for the robust seed supplies available this year, versus last year’s drought-reduced crop at this same time.

In its final estimate, USDA pegged 2022 sunflower production at 2.81 billion pounds, representing an increase of 48% from 2021. Production of oil-type varieties is expected to be 2.57 billion pounds, with non-oil varieties at 241 million pounds.

Non-oil use is projected to increase 10% this marketing year. USDA estimates sunflower seed crush at 1.39 billion pounds, up 38% from the last marketing year. Ending stocks are expected to rebound to 361 million pounds from last year’s low level of 295 million pounds.

Consistent demand for old-crop seed at crush plants and confection processors is expected in the final months of this marketing year due to strong demand fundamentals.

Prices stay strong

New-crop prices remain strong while the battle for acres continues. All sunflower demand sectors are offering Act of God contracts for fall delivery. These “fail safe” AOG contracts have become 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%. A 2% price premium is paid 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 $26.50 base contract close to $30 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 2023 U.S. oilseed crop prospects will progressively become a more important factor in price.

To keep up with price movement, visit sunflowernsa.com, or follow us on Twitter @NatlSunflower.

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