Resurgence in pre-harvest US soybean export sales, concerns about US maize production

By Jane Byrne

- Last updated on GMT

© GettyImages/Phototreat
© GettyImages/Phototreat

Related tags Maize Soybean Rapeseed Ukraine Wheat

Globally wheat stocks-to-use is up year-on-year, but a poor start for crops in Argentina with dryness and frosts needs monitoring, warns AHDB analysts in their latest grain market report.

Despite expectations of large global supplies of maize, concerns are creeping in for US production. The latest US yield forecasts from the Pro Farmer tour are above average but have fallen short of USDA expectations, they said.

“Corn continues to be a watch point for global grain markets, and concerns around the impact of recent US storms have driven corn futures (Dec-20) up $4.72/t since the start of August.”

Barley is maintaining its discount to other feed grains in order to remain competitive into export markets and compounders, a trend that is likely to continue, added those UK grain market specialists​.

Support for US soybean markets

Looking at the oilseeds market, on Friday, the US Department of Agriculture (USDA) noted soybean export sales of 400KT to China and 368KT to unknown destinations for delivery in the 2020/2021 marketing season.

“A resurgence in pre-harvest US soybean export sales to similar levels recorded in 2016/17, pre-US China trade disputes, has been providing support for US soybean markets,”​ wrote CRM AgriCommodities in a note yesterday.

Dryness concerns across the Midwest have developed in recent weeks, offering support to markets, according to the AHDB team’s analysis.

Despite this, the US Pro Farmer crop tour that surveyed fields last week estimates US soybean yields at a record level, with production estimated at 118.7Mt. For reference, the USDA estimates production at 120.4Mt. With potential for a tropical storm and hurricane to hit the US Gulf this week, high levels of rainfall could push into the Midwest, replenishing soil moisture levels.”

US fund managers increased their long, bullish position in CBOT soybean futures by 46,168 contracts, a new weekly record in data back to 2006. The potential for storm damage and strong US export demand were the main push behind this move, found the AHDB report.

“As of August 18, the net long stance is the biggest since the US-China trade dispute started back in 2018.”

Rapeseed outlook

In terms of rapeseed and sunflower markets, the harvest in Russia has now reached 27.4% complete at 409Kha complete, while the sunflower harvest has just begun, added CRM.

“The Black Sea OSR and sunflower harvest will be heavily influential upon EU oilseed price direction with the EU remaining in deficit in 2020/21,”​ according to those analysts.

Moreover, the AHDB team noted that last week, the Ukrainian rapeseed crop was lowered 0.2Mt and is now forecast at 2.7Mt, down from a record 3.4Mt last year, citing data from UkrAgroconsult.

“Strong EU import demand and the lowered production figures have led to a rise in Ukrainian domestic rapeseed prices.”

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