The smaller-than-expected 2016 U.S. sunflower crop should keep old-crop prices firm, and with tighter seed stocks, there is a strong likelihood that price premiums will be in place to encourage growers to desiccate sunflowers and harvest early.

New crop price direction will be driven by demand news and eventual 2016 crop production. USDA is projecting new-crop, oil-type sunflower prices in the range of $17.75 to $20.25 per cwt during the 2016-17 market year.

CASH IN: Sunflowers dry down for harvest. There may be price incentives this year to desiccate sunflowers after they mature so you can harvest them early.

USDA projects global sunflower production to be 8% higher in 2016-17 than last year, at 42.2 million metric tons (MMT). This figure can change dramatically over the course of the next few months, depending upon weather conditions this summer and fall.

However, global sunflower seed stocks at the end of 2016-17 are forecast to decline more than 18% to their lowest level since 1999. Sunflower oil trade is forecast to rise, supported by very strong demand in India, the European Union, North Africa and the Middle East. Growing global consumption of sunflower oil will result in global stocks declining nearly 13% to 1.26 MMT.

In its first estimate of production, USDA pegged U.S. sunflower production to decrease 16% in 2016-17 to 2.45 billion pounds, as yields retreat from last year’s record. Season-ending stocks in 2015-16 of all sunflower seed types are forecast to be at their highest level since 2009-10, at 357 million pounds. However, the decline in sunflower seed production in 2016 may exceed the higher carryover, so total supplies may actually decline from 3.29 billion in 2015-16 to 2.98 billion pounds. USDA expects higher crush demand for 2016-17, up 11% to 1.3 billion pounds, raising sunflower seed oil production to 545 million pounds.

U.S. sunflower oil exports are off to a great start and are expected to remain robust for the remainder of this marketing year, supporting seed prices at crush plants. For the first seven months of the 2015-16 marketing year, exports stand at 23,800 metric tons (MT), versus 18,300 MT last year at this time. Canada, Japan and Mexico remain the most important sunflower oil importers.

The strong U.S. dollar has affected confection exports significantly. Total exports of in-shell sunflower are up 24% at 41,000 MT, compared with 33,000 MT during the same time frame a year ago. Mexico is importing more in-shell sunflower this year. From October 2015 to April 2016, Mexico has imported 7,600 MT of in-shell sunflower, compared to 3,900 MT during the same time last year. Exports to Iraq have also increased, from 1,900 MT last year at this time to 7,800 MT. Spain remains the top importer of in-shell sunflower. Exports of sunflower kernel are down 33% from 7,100 MT to 4,700 MT.

For sunflower market news, see sunflowernsa.com. 

Sandbakken is executive director of the National Sunflower Association.