EU Oilseed Crushing May Drop on Tight Supplies, Oil World Says

European Union crushing of oilseeds including rapeseed, sunflower seed and soybeans will decline in coming months as the bloc’s stockpiles shrink and imports decline from South America, Oil World said.

Rapeseed processing by the 27 countries of the EU may be 6.37 million metric tons in the four months through the end of June, down 7.9 percent from the same time last year, with most of the drop coming in Germany and France, the Hamburg-based researcher said today in an e-mailed report. In the first eight months of the 2012-13 marketing year, which began July 1, rapeseed crushing rose 5.4 percent from a year earlier to 15.54 million tons. EU rapeseed stockpiles in early March were 800,000 tons smaller than in 2012, it said.

“Crushings of the three major oilseeds are set to decline in the European Union in the last four to five months of this season,” Oil World said. “Crushings were frontloaded in the first half of 2012-13. This is true primarily for rapeseed and resulted in a reduction of rapeseed stocks.”

The EU is the world’s biggest producer and consumer of rapeseed, used in biofuel and for cooking. It’s the second-largest importer of soybeans, after China, and the third-largest producer and user of sunflower seed, after Ukraine and Russia, according to the U.S. Department of Agriculture.

EU soybean crushing in February was 940,000 tons, down from 950,000 tons in the same month in 2012 and compared with a 12 percent annual jump in processing in January, Oil World said. Lower supplies in South America, where logistical problems have delayed shipments, “decimated” EU soybean crushing in February and March and the trend may continue in April, it said.

Tight Supplies

“Soya meal supplies have tightened significantly, mainly as a result of delayed arrivals of South American soya meal at the European ports,” Oil World said. “Supply relief can only be expected in the European Union from the end of May or early June onward. Argentine and Brazilian soybean crushings were unusually small until March but have reportedly started to recover pronouncedly in April.”

Sunflower seed crushing totaled 1.05 million tons in January and February in the EU, down 16 percent from last year, bringing the total processed since August to 3.94 million tons, 10 percent less than the previous season, Oil World said. Lower production and reduced stockpiles mean crushing from March through July may be 2.2 million tons, 200,000 tons less than last year.

Before it's here, it's on the Bloomberg Terminal.