Ample supplies and strong deliveries by producers are keeping a lid on sunflower prices. Currently, prices for oil-type sunflowers are down about 10% from a year ago and are being pressured by a large old-crop inventory. Total stocks of oil-type sunflower seed as of March 1 were 40% higher than a year earlier, according to USDA. This represents the highest level of sunflower seed stocks since 2006.

This scenario seems bearish for sunflower prices. In the short term, it will be until the industry uses up stocks. Overall, the 2016-17 marketing year is expected to be one that will allow sunflower products the chance to regain market share in domestic markets. Domestic oil-type seed usage for 2016-17 is seen rising 9% to 2.4 billion pounds compared to last year’s 2.21 billion. The crush is forecast to increase by almost 122 million pounds. This represents an increase of 11% in comparison to last year and will allow new domestic customers to add sunflower oil to their product line. Ending stocks of oil-type sunflower seed are forecast to decrease based on the higher estimated use.

Shifting to global sunflower production, only scant gains in global sunflower production are anticipated this year. For 2017-18, USDA is projecting sunflower output at 46.1 million metric tons, a 1% increase compared to 45.6 MMT last year. Moderately larger harvests in Russia, the European Union and Argentina are expected to offset a production decline in Ukraine. With stability in sunflower supplies, global trade may flatten at the current season’s level. Global crush is projected to grow 2% as major sunflower producers and importers increase processing to satisfy demand for meal and oil for both domestic and global markets.

Global sunflower stocks at the end of 2017-18 are forecast to decline, remaining 20% below the recent five-year average. Sunflower oil trade is forecast to rise significantly above the previous five-year average, supported by very strong demand in India, the EU, North Africa and the Middle East. Growing global consumption of sunflower oil will result in global stocks declining nearly 5% to a relatively tight 1.5 MMT.

Now that the South American oilseed harvest is finished, the attention of the oilseed market will shift to U.S. crop conditions and production prospects in the months ahead. USDA is projecting oil-type sunflower prices in a range of $15.65-$18.95 per cwt during this market year. New-crop sunflower seed prices could see some pressure from lower prices in the soybean market during the first part of the marketing year. This can change dramatically over the course of the next few months, depending upon the number of acres planted and yields achieved at harvest.

For more information, see sunflowernsa.com.

Sandbakken is the executive director of the National Sunflower Association.