Sunflower prices at the crush plants ended the week mixed at down 5 cents to up 25 cents. According to the September USDA Farm Service Agency crop acreage report, area planted to sunflower in 2019 increased 3 percent from 2018 and totals 1.33 million acres. Planted area of oil type varieties, at 1.18 million acres, is up 1 percent from 2017. Planted acreage of non-oil varieties, estimated at 154,800 acres, is up 13 percent from last year. Using a trend yield, initial estimates peg the US sunflower crop at around 1,000,000 MT, which compares to last year’s total of 960,000 MT. If realized this level of planted acreage will create tight ending stocks at the end of the 2019/20 marketing year given current usage. USDA will release its first estimate of US harvested sunflower acres and production in October. USDA pegged global sunflower production in 2019/20 at 52.6 million metric tons (MMT), this figure is up about 1.2 MMT from last year. The increase is mainly due to a larger crop in Russia and Ukraine. Argentina and European Union production is expected to be unchanged from last year. Global crush is projected to increase based on the higher production figure. Sunflower oil trade is forecast to rise, supported by very strong demand in India, European Union, North Africa, and the Middle East. Ending seed stocks are expected to stay relatively low representing only 5.4% of annual usage.
Something else to consider is the oil premiums that crush plants pay on sunflower. Sunflower is the only oilseed that pays premiums for oil content above 40%. Considering oil premiums that are offered at the crush plants on oil content above 40% at a rate of 2% price premium for each 1% of oil above 40%; this pushes a contract with 45% oil content gross return 10% higher per cwt. The $17.60 contract moves up to $19.35.