The USDA’s World Agricultural Supply and Demand Estimates (WASDE) report, published yesterday, indicated an increase in confidence in North America grain production, noted Peter Collier, senior advisor/analyst with that UK consultancy.
However, EU supplies were cut.
Alongside the WASDE, crude oil was also down significantly down yesterday, he reported. Brent crude fell back below $100/Bbl.
On a global scale, projected ending stocks for corn for 2022/23 were increased to 312.94Mt, up from 310.45Mt in June, said the analyst.
The major changes were to US corn, with beginning stocks increased to 38.35Mt - up from 37.71Mt - and production estimates also increased to 368.44Mt - up from 367.3Mt. As a result of the increased supply, ending stocks for US corn were raised to 37.33Mt, up from 35.55Mt in June.
Projected Russian corn production is 14.5Mt, lowered by 1Mt, while EU production was also marginally trimmed by 250Kt to 68Mt, with a projected reduction in consumption, reported Collier.
Tighter global wheat supply
Global wheat production estimates have been revised lower in this month’s USDA WASDE.
US wheat production estimates were hiked to 48.47Mt, up from 47.26Mt in June with ending stocks marginally increased. Estimates for Canadian wheat output are that it will rise 1Mt, to 34Mt, with an expected knock-on increase in exports.
Offsetting the US and Canadian production gains were downward projections for EU wheat production, which the USDA lowered 2Mt to 134.1Mt based on ongoing dry weather and the expected lower yields, primarily in Spain, Italy, and Germany.
The USDA expects lower Ukrainian wheat output, production is forecast to be down 2Mt on a reduced area to 19.5Mt, while data for Russian production shows a conservative increase, with it forecast at 81.5Mt.
The WASDE has trimmed wheat output in Argentina also, it is down 0.5Mt.
“Overall, the July WASDE tightened the global supply of wheat for 2022/23,” commented Collier.
Cut to US soybean exports
Following a cut to planted area estimates, the USDA expects reduced US soybean production, forecast at 122.61Mt, down from the 126.28Mt forecast in June, resulting in a cut to export projections and tighter ending stocks.
Soybean production in Argentina for the 2021/22 season is forecast higher, with the expectation of an increase in stocks being carried over into 2022/23.
A reduced soybean export volume from Brazil also resulted in a marginally increased carry over stock projection.
“Overall a broadly tighter outlook for global soybeans following cuts to US soy, but somewhat balanced with Chinese import demand projections trimmed to 98Mt,” Collier said.