Harvest of the U.S. sunflower crop has just gotten started. Initial yield reports 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 2018 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.

The market is beginning to look at 2019 production prospects in the Southern Hemisphere. Farmers in both Brazil and Argentina are talking about a significant increase in 2019 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.

According to the September USDA Farm Service Agency crop acreage report, area planted to sunflower in 2018 decreased 8% from 2017 and totals 1.29 million acres. Planted area of oil type varieties, at 1.17 million acres, is down 5% from 2017. Planted acreage of non-oil varieties, estimated at 131,000 acres, is down 30% from last year.

Using a trend yield, initial estimates peg the U.S. sunflower crop at around 875,000 metric tons (mt), which compares to last year’s total of 984,000 mt. If realized, this level of production will create very tight ending stocks at the end of the 2018-19 marketing year. USDA will release its final acreage and production estimates in January.

Global sunflower production in 2017-18 is projected at 48.9 million metric tons, this figure is up about 2.4mmt from last year. The increase is mainly due to a larger crop in Russia and Ukraine. Argentina and the European Union are expecting decreased production. Global crush is projected to increase based on the higher production figure.

Sunflower oil trade is forecast to rise, supported by very strong demand in India, the EU, North Africa and the Middle East. Ending seed stocks are expected to stay relatively low representing only 5.9% of annual usage.

Sandbakken is executive director of the National Sunflower Association.