Global Supply, Demand and Price Outlook and Impacts for Canada · 2017. 1. 17. · Exports Imports EU-28 (4%) Canada (72%) Australia (15%) Ukraine (7%) China (26%) Pakistan (9%) Mexico

Thomas Mielke, OIL WORLD, Hamburg 2017 AgDays in Brandon on 17 Jan 2017

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Global Supply, Demand and Price Outlook and

Impacts for Canada

Presentation in Canada on 17 Jan 2017

Thomas Mielke, ISTA Mielke, Oil World,Global Market Research on Oilseeds, Oils and Meals

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Rapeseed Global Trade Flows in 2016

Exports Imports

EU-28 (4%)

Canada (72%)

Australia (15%)

Ukraine (7%)China (26%)

Pakistan (9%)

Mexico (10%)

Japan (16%)

EU-28 (24%)


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Rapeseed Oil Global Trade Flows in 2016

China (16%)EU-28 (8%)

Russia (5%)

Australia (3%)

Exports Imports

India(9%)

EU-28 (5%)

Canada (67%)

U.S.A. (43%)

Norway (9%)

UAE (8%)


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Rapeseed production falling to a 5-year low of 62.1 Mn T 2016/17 (-1.9 Mn)

Farmers losing interest.

Biggest losses in -EU-28(- 2.2 Mn T)-China (-2.0 Mn T)-Ukraine (- 0.6 Mn T)

But sizeably rising crops in 2016/17 in Canada 19.2 (+0.8 Mn) Australia 4.1 (+1.2 Mn)

96/9797/98

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55

60

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70World Production (Mn T) and Area (Mn ha)

RAPESEED & CANOLA

Production

Harvested Area


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EU- 28 : Rapeseed Supply & Demand ( Mn T )J u l y / J u n e

16/17F 15/16 14/15 13/14 12/13 Opening stocks . . 1.24 .91 .88 1.01 1.54

Output . . . . . . . . . 20.08* 22.31 24.29 21.24 19.80

Imports (a) . . . . . 3.90* 3.50 2.58 3.66 3.42 from: Ukraine. . . . .88* 1.11 1.26 1.77 1.10 Canada . . . . . .75* .44 .13 .07 .04 Australia . . . . 2.15* 1.82 1.08 1.46 2.07

Exports (a). . . . . . .45* .35 .59 .29 .08 Crushings . . . . . . 23.09* 24.32 25.35 23.99 22.75 Other use (b) . . . . .78* .81 .90 .75 .92 Ending stocks . . . .90* 1.24 .91 .88 1.01 (a) EU intra-trade is excluded. (b) Residual.

EU- 28 : Rapeseed Supply & Demand ( Mn T )J u l y / J u n e

16/17F 15/16 14/15 13/14 12/13 Opening stocks . . 1.24 .91 .88 1.01 1.54

Output . . . . . . . . . 20.08* 22.31 24.29 21.24 19.80

Imports (a) . . . . . 3.90* 3.50 2.58 3.66 3.42 from: Ukraine. . . . .88* 1.11 1.26 1.77 1.10 Canada . . . . . .75* .44 .13 .07 .04 Australia . . . . 2.15* 1.82 1.08 1.46 2.07

Exports (a). . . . . . .45* .35 .59 .29 .08 Crushings . . . . . . 23.09* 24.32 25.35 23.99 22.75 Other use (b) . . . . .78* .81 .90 .75 .92 Ending stocks . . . .90* 1.24 .91 .88 1.01 (a) EU intra-trade is excluded. (b) Residual.

Daily futures from 2 Jan 2015 until 13 Jan 2017Ja15 Mar May Jly Sep Nov Ja16 Mar May Jly Sep Nov Ja17

330

340

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360

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380

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420Euronext (Matif) futures (first position)

Daily Rapeseed Prices in Europe

Euronext (EUR/T)


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A u g u s t / D e c e m b e r2004 2006 2008 2010 2012 2014 2016

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Exports Crush

Canada : Canola Disposals (Mn T)CANADA : Supply & Demand of Canola ( Mn T )

A u g u s t / J u l y16/17F 15/16 14/15 13/14 12/13

Op. stocks 2.02 2.54 2.82* .59 .75* Output . . . . . 19.20* 18.38 16.41 18.55 14.02* Imports . . . . .08* .10 .08 .07 .13

Exports . . . . 10.10* 10.30* 9.14 9.18 7.27 Crushings . . 8.90* 8.32 7.36 6.98 6.72 Other use. . . .40* .38* .26* .23* .32*

End.stocks. . 1.90* 2.02 2.54 2.82* .59

.08* .10 .13

10.10* 10.30* 7.27

1.90* 2.02 .59

CANADA : Supply & Demand of Canola ( Mn T )A u g u s t / J u l y

16/17F 15/16 14/15 13/14 12/13 Op. stocks 2.02 2.54 2.82* .59 .75* Output . . . . . 19.20* 18.38 16.41 18.55 14.02* Imports . . . . .08* .10 .08 .07 .13

Exports . . . . 10.10* 10.30* 9.14 9.18 7.27 Crushings . . 8.90* 8.32 7.36 6.98 6.72 Other use. . . .40* .38* .26* .23* .32*

End.stocks. . 1.90* 2.02 2.54 2.82* .59

.08* .10 .13

10.10* 10.30* 7.27

1.90* 2.02 .59


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World supplies of rapeseed & canola are currently tight

Prices are currently also supported by a global tightness of all vegetable oils

Outlook:Canola prices in Canada will be largely determined by the price developments of the major oilseeds and oils on the world market

What the global outlook and what does that suggest for the timing of the marketing of Canadian oilseeds in the next 12 months ? ?


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Impacts from palm oil and other vegetable oils


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Oil palms the by farmost productive crop

To produce 1 Tonne ofsoya oil requires 8 times as much acreagethan in the case ofpalm oil

(a) Calculated based on average crush and seed yield

10 years to 1995 10 years to 2005 10 years to 20150

0,5

1

1,5

2

2,5

3

3,5

4Palm Oil Sun oilRape oil Soya oil

in Tonnes per Hectare

World Average Oil Equivalent (a)


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O c t o b e r / S e p t e m b e r

01/02

02/03

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06/07

07/08

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11/12

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0

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20

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50Malaysia

Indonesia

Rest of World

PALM OIL : Exports of Key Countries (Mn T)

O c t o b e r / S e p t e m b e r 01/02

02/03

03/04

04/05

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09/10

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12/13

13/14

14/15

15/16

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0

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20

30

40

50Rapeseed oil

Sunflower oil

Soya oil

3 Seed Oils: World Exports (Mn T)


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19801982

19841986

19881990

19921994

19961998

20002002

20042006

20082010

20122014

2016

0

10

20

30

40

50

60

70

Malaysia Indonesia

Rest of World

in Major Countries (MnT) Palm Oil Production 1980 - 2016

Changes 2016:

Malaysia -2.6 Mn T(17.3 Mn T)

Indonesia -1.6 Mn T (31.8 Mn T)


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January 2014 until Dec 20161

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400

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700

800

900

1000

1100 SBO Dutch

Sun oil EU

Rape oil Du tch

CPO cif R'dam

Monthly Prices of 4 Oils (in US-$/T)

2014 2015 2016

+46%


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O c t o b e r / S e p t e m b e r12/13 13/14 14/15 15/16

-4

-3

-2

-1

0

1

2

3

4

Palm Oil Soya OilSun Oil Rape Oil

Change on Year in Mn T

World Production of 4 Major Oils


07/08 08/09

09/10 10/11

11/1212/13

13/1414/15

15/16-4

-2

0

24

6

8

10

12Production

Change From Year Ago in Mn T8 Veg. OILS: World Production

Unusual setback of production in 2015/16 ……declines in palm oil & rapeseed oil could not be compensat ed


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O c t o b e r / S e p t e m b e r12/13 13/14 14/15 15/16 16/17

-4

-2

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Palm Oil Soya OilSun Oil Rape Oil

Change on Year in Mn T

World Production of 4 Major Oils


07/08 08/09

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15/1616/17

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12Production

Change From Year Ago in Mn T8 Veg. OILS: World Production

Steep increase in production in 2016/17…… but extremely low stocks decisively curb supply and deman d growth in 2016/17


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Outlook for 2016/17:

Very big increase in worldproduction by 10-11 Mn T in 2016/17

of which:Palm oil . . . +5.7 Mn (vs -3.9)Lauric oils +0.7 (vs -0.75)

Soya oil . . . +2.4 Mn (vs +2.6)Rapeseed oil - 0.8 (vs -1.4)Sunfl. oil . . +1.56Groundn. oil +0.5Cotton oil . +0.07

World supplies of oils & fats will remaintight in Oct/March 2016/17. Higher prices.

8 VEGETABLE OILS: World Supply & Usage ( Mn T )O c t / S e p t

16/17F Change 15/16 14/15 Op’g stocks 23.3* -5.4 28.7 26.7 Production 177.3* +10.5 166.8 170.4 Supplies 200.6* +5.1 195.5 197.1

Consumption 177.0* +4.0 173.0 167.6

8 VEGETABLE OILS: World Supply & Usage ( Mn T )O c t / S e p t

16/17F Change 15/16 14/15 Op’g stocks 23.3* -5.4 28.7 26.7 Production 177.3* +10.5 166.8 170.4 Supplies 200.6* +5.1 195.5 197.1

Consumption 177.0* +4.0 173.0 167.6


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Impacts from soybeans and other oilseeds


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Soybeans 62%

Rapeseed 11%

Sunseed 9%

Cottonseed 7%

Groundnuts 6%

Copra & Palmkernels 4%

Other 3 Oilseeds 2%

2016/17 -- 540.7 Mn T

Other ctries 14%

EU 6%

C.I.S. 7%

Canada & U.S.A. 28%

Brazil 20%

Argentina 11%

China 8%

India 7%

10 Oilseeds - - 540.7 Mn T

Global Production of 10 Oilseeds

10 years earlierIndia accounted for9% of world oilseedproduction and China for 13%

In 2016/17: Soybeans: World 333 Mn T (up 21 Mn)USA 117 Mn T (up 10 Mn)


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75/76 81/82 87/88 93/94 99/00 04/0 5 10/11 16/17F0

20

40

60

80

100

120

140

160

180Soybean Crop Trend Since 74/75 (Mn T)

U.S.A.

Argentina, Brazil & Paraguay


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Record yield and soybeanoutput in the USA in 2016

But global dependence on US soybeans and productsincreasing in 2016/17

In Sept/Feb 2016/17 US soybean exports soaring to46.3 Mn T (up 6 Mn T), thus73% of world exports

U.S.A. : Soybean Supply & Demand ( Mn T ) S e p t e m b e r / A u g u s t

16/17F 15/16 14/15 13/14 12/13 Op. stocks . . . 5.35 5.19 2.50 3.83 4.61 Crop. . . . . . . . 117.21 106.86 106.88 91.39 82.79 Imports . . . . . .78* .66 .93 2.10 1.01

Exports . . . . . 57.80* 52.74 50.20 44.65 36.17 Crushings . . . 52.70* 51.33 51.16 47.38 45.97 Other use 3.32* 3.28 3.77 2.77 2.45

End. stocks . . 9.52* 5.35 5.19 2.50 3.83

Stocks/usage 8.4% 5.0% 4.9% 2.6% 4.5%

U.S.A. : Soybean Supply & Demand ( Mn T ) S e p t e m b e r / A u g u s t

16/17F 15/16 14/15 13/14 12/13 Op. stocks . . . 5.35 5.19 2.50 3.83 4.61 Crop. . . . . . . . 117.21 106.86 106.88 91.39 82.79 Imports . . . . . .78* .66 .93 2.10 1.01

Exports . . . . . 57.80* 52.74 50.20 44.65 36.17 Crushings . . . 52.70* 51.33 51.16 47.38 45.97 Other use 3.32* 3.28 3.77 2.77 2.45

End. stocks . . 9.52* 5.35 5.19 2.50 3.83

Stocks/usage 8.4% 5.0% 4.9% 2.6% 4.5%


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07/0 8

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16/17

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3

3,5

Argentina Brazil

Soybean Area - change on year (Mn ha)


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Flooding in South Santa Fe


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Daily futures from 30 Aug 2016 until 13 Jan 2017Sep Oct Nov Dec Jan

940

960

980

1000

1020

1040

1060Jan 2017 position

50-day moving average

200-day moving average

CBOT: Daily Soybean Futures (c/bu)


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1 99 7 1 99 9 2 00 1 2 00 3 2 00 5 2 00 7 2 00 9 2 01 1 2 01 3 2 01 5 2 01 7F0

20

40

60

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100S o yb e a ns : W or l d S to c ks a s o f e n d-A u gu s t (M n T)In the 2016/17 season

world soybean stocks areset to recover. Productionto exceed consumption, despite recent downwardrevisions in the USA andArgentina

Or will the losses in Argentina be greater?

A shortage in soybeansmay arise in 2017/18, ifthe excellent yields in theUS cannot be repeated.


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Rising dependence on soybeans (a meal seed) increases the oil share

Rapeseed and canola are benefitting


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01/02 02/03

03/04 04/05

05/06 06/07

07/08 08/09

09/1010/11

11/12 12/13

13/1414/15

15/1616/17F

80100120140160180200220240260280300

10 Oilseeds : World Crushings (Mn T)

9 other seeds

Soybeans

Further boost in worldsoybean crushings required in 2016/17, because1) rising demand2) still insufficient palmoil supplies3) tightness of oth seeds4) low stocks of veg oils


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Soya meal 66.5%

Rape meal 10.0%

Sun meal 5.4% Fish meal 1.3%

Others 16.8%

2016/17 - - 339.5 Mn T

Soya meal 50.7%

Rape meal 10.3%

Sun meal 7.1%

Fish meal 4.6%

Others 27.3%

1990/91 - - 137 Mn T

World Production of 12 Oilmeals


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Soya Oil 25,0%Palm Oil 29,9%

Rape Oil 11,5%

Sun Oil 8,3%

PKO&CNO 4,6%Others/An.Fats 20,8%

2016/17F - - 213.5 Mn T

Soya Oil 20,1%

Palm Oil 14,2%

Rape Oil 11,4%

Sun Oil 9,9%

PKO&CNO 5,2%

Others/An.Fats 39,3%

1991/92 - - 83.5 Mn T

World Production of 17 Oils & FatsUp 156% in 25 years

Average annualincreaseof 5.2 Mn T

Palm oilaccountfor 40% ofthe increase(+2.1 Mn p.a.)


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Monthly Averages until 12 Jan 2017Ja03 Ja04 Ja05 Ja06 Ja07 Ja08 Ja09 Ja10 Ja11 Ja12 Ja13 Ja14 Ja15 Ja16 Ja'17

28

30

32

34

36

38

40

42

44

46Calculated with prices in N. Europe

Soya Oil Share of the Combined Product Value

%


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Impacts from biodiesel


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89/90 92/93 95/96 98/99 01/02 04/05 07/08 10/11 13/14 16/17F

020406080

100120140160180200220

biofuel food and other

Total Usage in Mn T

17 Oils & Fats : World Consumption

Average demandgrowth in past 5 seasons:

Total +6.4 Mn T per year

Biofuel +1.6 Mn T Food/other +4.8 Mn T

Substantial Growth in World Demand of Oils/Fats ! !


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In Mn T 16/17 15/16 14/15 13/14

China +.32 +.36 +.58 +.78

India +.90 +1.27 +1.37 +.85

EU-28 -.17 +.37 +.04 +1.96

U.S.A. +.35 +1.18 +.38 +.48

Argentina +.15 +.30 -.25 +.63

Indonesia +.65 +1.70 -1.39 +1.13

Brazil +.39 -.10 +.58 +.37

Others +1.56 +1.26 +2.78 +2.81

World +4.49 +6.34 +4.09 +9.01

- Biodiesel fueled veg. oildemand in 2015/16

-USA, Argentina & Indonesia accounted for50% of demand growth

- slowdown in 2016/17 will be necessary!

17 Oils & Fats: Consumption Growth


© www.oilworld.de

Policy Measures Boosting Use of Soya Oil & Palm Oil for Biodiesel Production in 2016

2012 2013 2014 2015 2016 2017

0

1

2

3

4

5

6

7

8

9 Malaysia

Thailand

IndonesiaEU-28

Palm Oil Use for Biodiesel (Mn T)

+1.7 Mn T

2012 2013 2014 2015 2016 20170

1

2

3

4

5

6

7

8

9U.S.A.ArgentinaBrazil

Soya Oil Use for Biodiesel (Mn T)

+1.2 Mn T


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2005 2007 2009 2011 2013 2015 2017F0

5

10

15

20

25

30

35World Production of Biodiesel (Mn T)

BIODIESEL: World Production by Country ( Mn T )J a n u a r y / D e c e m b e r

2017F 2016 2015 2014 2013 EU-28 12.40* 12.35* 12.37 12.20* 10.65 U.S.A. 6.20* 5.85* 4.90 4.80 4.72 Argentina 2.55* 2.63* 1.81 2.58 2.00 Brazil 3.80* 3.36* 3.46 3.00 2.56 Colombia .49* .45* .51 .52 .50 Singapore .88* .86* .82 .76 .79 Indonesia 3.20* 3.00* 1.16 2.92 2.60 Malaysia .60* .50* .67 .60 .47 Thailand. 1.10* .98* 1.03 .99 .93 Oth. ctries. 3.00* 2.94* 2.89 2.94* 2.65*Total 34.22* 32.92* 29.62 31.30 27.87

Change in +1.30* +3.30* -1.68 +3.43 +3.29

BIODIESEL: World Production by Country ( Mn T )J a n u a r y / D e c e m b e r

2017F 2016 2015 2014 2013 EU-28 12.40* 12.35* 12.37 12.20* 10.65 U.S.A. 6.20* 5.85* 4.90 4.80 4.72 Argentina 2.55* 2.63* 1.81 2.58 2.00 Brazil 3.80* 3.36* 3.46 3.00 2.56 Colombia .49* .45* .51 .52 .50 Singapore .88* .86* .82 .76 .79 Indonesia 3.20* 3.00* 1.16 2.92 2.60 Malaysia .60* .50* .67 .60 .47 Thailand. 1.10* .98* 1.03 .99 .93 Oth. ctries. 3.00* 2.94* 2.89 2.94* 2.65*Total 34.22* 32.92* 29.62 31.30 27.87

Change in +1.30* +3.30* -1.68 +3.43 +3.29

Possible Changes in the EU Biodiesel Policy from 2020 on ward ! ?


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Concluding Statements


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© www.oilworld.de

At the end of the season2003 2005 2007 2009 2011 2013 2015 2017F8

10

12

14

16

18

20

22

17 oils & fats

10 oilseeds

World Stocks in Percent of Annual Usage (%)Oils & fats stocksdeclining relative toannual consumption

A second year (2017/18) without severe weatherproblems is required tobring oils & fats stocks tomore comfortable levels


© www.oilworld.de


I expect a further rallyin Jan/March 2017, with crude palm oil in Rotterdam probablypeaking at around US $ 830

This will indirectlysupport canola pricesin Canada

Weekly p rices f rom 1 Jan 2015 until 12 Jan 2017Ja15 Mar May Jly Sep Nov Ja16 Mar May Jly Sep Nov Ja'17

450

500

550

600

650

700

750

800

850Palm stearin RBD, Mal,cif Rott

Palm oil c rude, c if N.W . Eur

Weekly Prices of Palm Stearin & Oil (US-$/T)


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© www.oilworld.de


There should be good selling opportunities of canola in the next 4 – 8 weeks

Farmers should regards prices of 500 – 520 Can-$ sufficiently attractive to increase both old-and new-crop selling

There is an increased possibility of considerable price pressure in vegetable oils from May or June 2017 onward

The bearish price trend is likely to accelerate in 2018, unless major weather-caused crop losses occur


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An Emerging Trade Conflict with China ?

How Likely? Possible Effects on the Global Market?


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© www.oilworld.de

O c t o b e r / S e p t e m b e r94/95

95/9696/97

97/9898/99

99/00 00/01

01/02 02/03

03/04 04/05

05/06 06/07

07/08 08/09

09/1010/11

11/1212/13

13/1414/15

15/1616/17

0

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20

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40

50

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70

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100China

Rest of world

Imports of Soybeans (Mn T)In Jan/Dec 2016 China imported:

83.7 Mn T of soybeans

3.8 Mn T of rapeseed


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Soybean Trade Flows in 2015USA (37%)

Paraguay & Uruguay (6%)

Brazil (42%)

Argentina (9%)

EU-28 (11%)

China (62%)

Mexico (3%)

Exports Imports

Ukraine (2%)

Other Asia(17%)


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© www.oilworld.de

98/99 01/02 04/05 07/08 10/11 13/14 16/17F20

30

40

50

60

70

80

90

100

110

120Production (Mn T)Crushings (Mn T)

CHINA: Oilseed Output & Crushings


© www.oilworld.de


Thank Youfor Your Kind Attention !

© Copyright 2017 ISTA Mielke GmbH. This information is destined for internal use only. Any copying, reproduction and/or redistribution of the proprietary content without the prior written consent of ISTA Mielke GmbH is prohibited. Any violation of our copyright will be PROSECUTED. The information and analyses given in this service are considered to be reliable. Every care is taken to ensure the accuracy and completeness of the contents. We cannot, however, accept any responsibility for them nor for the accuracy of our forecasts and opinions or any liability for the subscriber’s use.Kindly visit us on www.oilworld.de For further information you may call +49 40 76105021

Documents

Global Supply, Demand and Price Outlook and Impacts for Canada · 2017. 1. 17. · Exports Imports EU-28 (4%) Canada (72%) Australia (15%) Ukraine (7%) China (26%) Pakistan (9%) Mexico