Return to Normal: Major Oilseed Forecast by the Oilseeds Union on oilseed residue in the 2024/25 season.

In the upcoming 2024/25 season, a return to traditional levels of oilseed carryovers is expected, totaling approximately 1.5 million tons, as projected by the Oilseeds Union. After three seasons with carryover volumes exceeding 2.5 million tons, the next season anticipates normal closing raw material stocks. Specifically, it is expected that sunflower carryovers will amount to 657 thousand tons, instead of nearly 1.7 million tons at the beginning of the 2023/24 season. Soybean residues will be around 260 thousand tons, which is 100 thousand tons more than the previous season due to a record harvest. Rapeseed and safflower closing stocks are expected to be at 225 thousand tons, approximately 50 thousand tons less than in the 2022/23 season but consistent with the average over the last five seasons.

The head of the Oilseeds Union, Mikhail Maltsev, notes that the reduction in carryovers is associated with an increase in processing volume. Sunflower oil production has increased by almost 20%, from September of the previous year to May, almost 1 million tons more were produced compared to the same period in the 2022/23 season. Overall vegetable oil production has increased by 11%, reaching nearly 7.7 million tons by the end of May. Maltsev points out that the decrease in oilseed stocks in agricultural enterprises indicates an increase in raw material purchases by processors. He also added that "there is no raw material shortage on the market today, especially for sunflower seeds."

According to him, most enterprises are supplied with raw materials until the end of the season. According to the Union's estimates, domestic oil plants will process nearly 3.8 million tons of sunflower seeds and produce over 1.6 million tons of oil by the end of the 2023/24 marketing year. In total, almost 26.4 million tons of oilseeds will be processed during the season, exceeding the previous season's results by more than 1.5 million tons. "If agricultural producers do not return to the vicious practice of holding back raw material sales, then record oilseed carryovers will become a thing of the past," Maltsev added.

Sources from the market report that initial oilseed stocks in the 2024/25 season are indeed expected to be lower than last year, with the most significant decrease expected in sunflower seeds – a drop of approximately 1 million tons compared to the start of the 2023/24 season. According to them, this is due to a more active realization of sunflower seeds to oil plants. "As for other main oilseed crops, there is fierce competition for raw materials throughout the season, so the carryovers are insignificant. Processors actively buy both rapeseed and high-protein soy, as there is demand for them," says the source.

According to the source, the situation related to the decline in oilseed stocks will return the market to relatively previous balances, which, on the one hand, may somewhat support the profitability of plant growers and, on the other hand, will force players to operate under conditions of tougher competition for raw materials. It was reported that in May 2024, shipments of oilseed crops by agricultural enterprises decreased by 7.7%, reaching 1.1 million tons. The total volume of deliveries from January to May decreased by 3.1%, totaling 6.4 million tons. At the same time, sunflower seed sales increased by 10.3% in May, reaching 776.7 thousand tons; from January to May, they increased by 10.6%, totaling 4.1 million tons.

More news from the agro-industrial complex - in our Telegram channel. Subscribe!