Although there have been significant concerns around the production potential for European rapeseed, following sharp frosts and prolonged dry spells, confidence in yields is increasing, said the UK based oilseed and grain market analysts.
The EU Mars report in May increased estimates for European yields to an average of 3.21T/Ha, over 5% above average.
“At an estimated 16.7MT, European rapeseed production is forecast up year on year, and confidence is increasing.”
However, although crop size estimates are rising, the overall import requirement next season will remain broadly the same, maintaining a large reliance on Ukraine, Canada, and Australia, they said.
US soybean prospects
Soy markets continue to be torn between tight old crop markets and the prospects for increasing supply in 2021/22, according to CRM Agri.
“The exceptionally tight current season projections for US ending stocks are maintaining support for Chicago soybeans. While the grain harvest, especially in Europe seems increasingly close, it is easy to overlook the fact that the US soybean harvest is still a long way off. The bulk of the harvest will not be underway until the end of September, and tight stocks will remain a key determinant for the overall oilseed complex.”
Though, they noted that US soybeans are certainly off to a good start.
“Progress has been well ahead of average. On average, US soybean emergence has been almost two weeks ahead, with good rainfall having now fallen across the majority of the US soy producing regions.”
It is still very early on in the US growing season still, and there are plenty of risks for new crop production.
“Southern hemisphere supply of soybeans and meal is also starting to ease the globally tight markets, but for markets to make a significant shift, the crop prospects for US beans will need to be better quantified. We remain cautiously bearish toward the overall oilseed complex in the long term, but with tight US stocks, downside risk pre-harvest will be limited.”
Chinese corn demand
While US supply confidence is increasing, reduced Brazilian corn availability will continue to support grain markets, said the analysts. With continued dry weather and growing development of poor yield prospects, they anticipate a substantial cut to production estimates in the next WASDE report.
Corn demand, specifically from China, remains the big question for corn markets.
Jump expected in European wheat yields
In terms of wheat, good weather and improved crop conditions across the northern hemisphere continue to provide greater production confidence as harvest approaches. The EU Mars report forecast wheat yields across Europe to jump by over 4% above average, pushing EU27 wheat production up to 127MT, up over 9MT year on year.
“The continued good weather, higher temperatures and significantly improved moisture conditions will continue to aid production confidence and add to the potential size of the European surplus.
“Aiding long term confidence in global wheat markets have been beneficial conditions in Ukraine and Russia, not only for winter wheat but also with rainfall in key Russian spring wheat areas, spring wheat prospects are also improving.”