Old and new crop prices were unchanged this week at the crush plants, according to the National Sunflower Association.
The market continues to watch developments in the Black Sea region as drought conditions continue to threaten sunflower production. According to Oil World it is still too early for reliable damage estimates, but losses could be significant.
Harvest has just started in Russia and Ukraine so more will be known in the weeks ahead. Oil World recently lowered its production estimates for Russia to 17.1 million metric tons and Ukraine to 13.4 MMT. This is a significant drop off from last year’s production of 18.4 MMT in Russia and 14.9 MMT in Ukraine. Other market estimates for Ukrainian production are in a range of 12.7-13.5 MMT.
Oil World also made sizable downward revisions to production prospects in Romania, Bulgaria and Turkey. The Hamburg based publication expects demand rationing will be inevitable in the months ahead due to lower beginning seed stocks and reduced global sunflower production. The situation bears watching as Russia and Ukraine are the largest exporters of sunflower oil.
The potential reduced availability of sunflower seed and oil production poses risks for global markets and prices will be responsive to potential production shortfalls. Warmer than normal temps with dry weather conditions are expected over the next two weeks. This is welcome news as crop development for the most part remains behind the five-year average and will continue pushing the crop toward maturity in the Dakotas and Minnesota.
