Commodities watch
WASDE: US corn market looking tighter, lots of uncertainty around Black Sea supply
As regards US corn, the market is looking tighter. US corn production in 2022/23 is estimated at 367.3Mt, down from 383.9Mt in 2021/22, with ending stocks projected at a tight 34.5Mt.
Ending stocks, in terms of US soybeans, have been revised down further to 6.4Mt, lower than the 7.1Mt last month. That follows the fast export pace of old crop soy, noted CRM Agri in a review.
However, new crop production is estimated at a record 126.3Mt, an improvement on soy output in 2021/22, which reached 120.7Mt, and the US Department of Agriculture (USDA) sees a slight recovery in stocks, reported the UK analysts.
Old crop wheat ending stocks in the US were cut to 17.8Mt, a reduction from the 18.5Mt estimated in the April WASDE. “However, the main focus is next season, and with a crop estimated at 47.1Mt, only up slightly from the spring drought impacted 44.8Mt in 2021/22, ending stocks for US wheat in 2022/23 are projected to be at the lowest level since 2013/14,” said the CRM Agri team.
Ukraine
The largest unknown arguably for next season is Ukraine, continued the analysts, and the USDA is quick to point out that war has “significantly increased the uncertainty of agricultural supply and demand conditions in the region.”
In terms of corn prospects in the conflict hit country, the US agency puts production estimates for next season sit at 19.5Mt, a significantly reduction from the 42.1Mt this season. “Export projections at 9Mt are also down from an expected 23Mt this season.”
Production forecasts for Ukraine’s wheat output fell to 21.5Mt, from 33Mt in 2021/22. “Like with corn, export estimates were also lower to just 10Mt, down from 19Mt this season.”
Russia
Wheat production in Russia is forecast at 80Mt for next season, up slightly from 75.2Mt this season, while exports are estimated at 39Mt.
Protein meal prospects
Global protein meal consumption is expected to grow 3% in 2022/23, recovering from slow growth in the past two marketing years, according to the latest WASDE.
Nearly half of the gains are in China where soybean crush is forecast to increase 6 million tons from 2021/22 to 95 million tons.
The USDA expects exportable supplies of oilseed meals and oils to recover, with higher 2022/23 crush for Canada and South America, which, it said, will offset declines in sunflower products out of Ukraine.
Furthermore, it anticipates palm oil exports to increase for Indonesia after slower-than-normal shipments and export restrictions.
EU
Looking at how the EU will fare, official early USDA wheat production estimates for next season are 136.5Mt, only marginally down on the 138.4Mt last season, though there has been a large coverage of drought conditions in Europe.
However, due to export demand increasing by 5Mt to 36Mt, ending stocks are forecast to remain under pressure at 10.6Mt.
Canada
After last season’s drought, production estimates are recovering in Canada. The USDA sees wheat production at 33Mt, a marked recovery from the 21.7Mt harvested in 2021/22.
Canadian rapeseed estimates are also encouraging, forecast at 20Mt, said the CRM Agri team.
Brazil
“In a bit of a surprise, old crop corn production estimates [for Brazil] were maintained at 116Mt, and old crop soybean production estimates were also maintained at 125Mt.
"A long way off, but 2022/23 estimates for corn and soy are at 126Mt and 149Mt, respectively.”
