In its Australian December crop report, ABARES forecast wheat production to reach a new record of 36.6Mt, a 1% increase over the previous record set last year, and despite the widespread flooding, noted CRM Agri.
“Crop abandonment in the Eastern states due to flooding and extreme rainfall over spring is estimated to total around 16% of planted area in New South Wales, 7% in Victoria and 5% in Queensland.
“Barley production is forecast to reach 13.4Mt, the fourth largest on record while canola production is forecast to also reach a new high of 7.3Mt, a 4% improvement over the previous record set last year and 100kt higher than the November USDA estimate,” said those analysts.
Brazilian soybean and corn output
Conab also released its December crop report this week. Brazilian soybean production is forecast to reach 153.48Mt, which is down on the 153.54Mt estimate from last month but still up 22.2% on last season’s drought-impacted crop. Conab forecast that corn production will hit 125.83Mt, slightly lower than last month’s 126.4Mt projection.
The market standout this week has been soymeal, pushing to new contract highs and recording gains every day this month, commented the CRM Agri team. With soymeal prices shooting higher, rapeseed meal has also been gaining in support.
“While soymeal has outperformed this week, the constant downtrend in wheat markets that started in early November is now also being questioned, with May-23 Chicago bouncing off a low of c$735/Bsh, Paris milling wheat pushing up from a €300/t low and UK feed wheat moving up from lows of £240/t.
“The late gains in both corn and wheat have come despite crude oil continuing to come under pressure this week, falling every day for the last seven days, from hovering close to $85/Bbl to $76/Bbl,” they added.
Weekly US ethanol production increased to 1077K barrels per day, the highest level in a year, offsetting some of the poor export pace concerns.
US export sales this week continued to disappoint from a grain perspective, added the analysts.
While concerns surrounding the global economic outlook continued to build over the past week, the team acknowledged the positive developments in China in relation to the lifting of Covid-19 restrictions there, which they said had been a key headwind for global growth this year.