Wheat

OVERVIEW FOR 2022/23

Global production is down this month primarily on smaller crops in the European Union, Ukraine, and Argentina and only partially offset by increases for Canada and Russia. Global consumption is lowered this month, mainly on lower feed and residual for the European Union and Ukraine. Ending stocks are revised down mostly on reductions for Ukraine and Pakistan. Imports are raised as higher imports for Algeria, the European Union, Japan, Pakistan, and Vietnam more than offset lower imports for Philippines and the United States. Exports are up for Canada, Brazil, and the United States with reductions for Argentina and the European Union. The U.S. season-average farm price is down 25 cents per bushel to $10.50.

Global: Global wheat prices declined significantly since the June WASDE as ongoing winter wheat harvests in the Northern Hemisphere applied downward pressure. Furthermore, various negative macroeconomic factors have heightened concern of a global recession, and the value of the U.S. dollar continues to surge.

EU quotes remain the most competitive and have fallen $62/ton over the past month amidst its winter wheat harvest and the declining euro. Russian quotes slid $55/ton as changes to the country’s export tax calculation to rubles may allow for additional exports and as production forecasts remain favorable after excessive wetness earlier. Canadian quotes experienced the largest drop of $113/ton as spring wheat plantings continued with improved conditions. U.S. quotes fell $95/ton from exceptionally high levels as the winter wheat harvest advances quickly despite a slight downward revision to area planted in the NASS Acreage Report. Australian quotes slid $51/ton as exports slow towards the end of the trade year.

Argentine quotes remain the most expensive with old- crop supplies being exhausted but dropped $59/ton since last month as new-crop plantings are over 50 percent complete.

Corn

OVERVIEW FOR 2022/23

Global corn production is forecast down as crop reductions for Russia, the European Union, and Kenya exceed a gain for Paraguay. Global imports are little changed with smaller forecasts for Costa Rica and several African countries, essentially offsetting increases in Nicaragua and the Philippines. Global exports are up with a higher forecast for Paraguay more than offsetting a decrease for Russia. The U.S. season-average farm price is down 10 cents to $6.65 per bushel.

OVERVIEW FOR 2021/22

Global corn production is forecast up with increases for Paraguay and the Philippines. Global exports are also forecast up with gains for Ukraine, Canada, the European Union, Paraguay, and Zambia offsetting a decrease for Argentina. Global imports are forecast to increase marginally with gains for Canada and Zimbabwe exceeding minor reductions across Africa, the Middle East, Central America, and Asia. The U.S. season-average farm price is unchanged at $5.95 per bushel.

Corn Prices

Since the June WASDE, major exporters’ bids have eased. In the United States, the June 30 release of the NASS Acreage report showed planted corn area slightly higher than intentions reported in the March Prospective Plantings. Harvested area was also forecast up from the June WASDE assumption. In conjunction with sluggish demand, U.S. bids were down $20/ton to $318. Argentine bids were down $34/ton to $273 and Brazilian bids were down sharply by $48/ton to $283 as plentiful safrinha supplies have started to hit the market. Ukrainian bids remain unpublished.

Oilseeds

PROJECTION FOR 2022/23

Global 2022/23 oilseed production is forecast down to 643 million tons as lower U.S. soybean production is only partially offset by higher Russia sunflowerseed production. Oilseed trade is down slightly on lower U.S. soybean exports partially offset by higher Brazil soybean exports. Crush is up marginally on higher Russia and EU sunflowerseed processing. Global ending stocks are down on lower U.S. and China soybean and Ukraine sunflowerseed carryout, partially offset by higher Argentina soybean stocks.

Global protein meal production is up slightly in line with crush. Meal exports and domestic consumption are up marginally predominantly on higher sunflowerseed trade and consumption. Meal ending stocks are down 1 percent on smaller sunflowerseed meal carryout. Global vegetable oil production is up slightly in line with crush. Trade is down fractionally on lower Malaysia palm oil exports. Domestic consumption is little changed overall as higher EU sunflowerseed oil consumption is offset by lower EU and Sub-Saharan Africa palm oil consumption. Ending stocks are up over 1 percent led by sunflowerseed and soybean oil gains. The projected U.S. season-average farm price for soybeans is down 30 cents to $14.40 per bushel.

PROJECTION FOR 2021/22

Global 2021/22 oilseed production is up slightly at 600 million tons as higher China rapeseed and Argentina soybean crops are partially offset by lower global cottonseed production. Oilseed trade is nearly unchanged as lower South America soybean exports are mostly offset by higher global sunflowerseed and rapeseed trade. Crush is little changed overall as lower China soybean processing is mostly offset by higher South America soybean and China rapeseed crush. Ending stocks are up over 2 percent on higher South America soybean and EU rapeseed carryout.

Global protein meal production is little changed overall in line with offsetting changes to crush. Global meal trade is up marginally on higher Russia sunflowerseed exports. Meal consumption is down slightly led by lower China soybean meal consumption. Global ending stocks are up fractionally on higher soybean meal carryout partially offset by lower sunflowerseed meal stocks. Global vegetable oil production is down slightly on lower Malaysia palm oil production. Global vegetable oil trade is nearly unchanged this month as lower Argentina soybean oil and Malaysia palm oil exports are mostly offset by higher sunflowerseed oil trade. Global vegetable oil consumption is down fractionally on lower palm oil food use, while ending stocks are up slightly on higher EU rapeseed carryout. The projected U.S. season-average farm price for soybeans is unchanged at $13.35 per bushel.

Market reports:

UK feed wheat futures (May-21) rose by £2.25/t on 18.02.2021, to £204.25/t. The Nov-21 futures contract rose by £1.35/t, reaching £169.00/t. The gains followed higher global wheat prices, but stronger sterling capped UK futures.

.Global wheat prices rose as cold weather remains a threat to wheat in the US, and SovEcon cut 1.5Mt from its 2021 Russian wheat crop forecast.

.US farmers may plant 0.5Mha more maize and 2.8Mha more soyabeans for harvest 2021 than harvest 2020, according to the USDA. The USDA released the forecasts at its annual outlook conference on 18.02.2021. The higher forecasts pushed prices for both crops lower.

.Paris rapeseed futures (May-21) gained €1.50/t to €460.00/t on 18.02.2021, despite falls in Chicago soyabean prices. The forecast 4% rise in the 2021 Canadian canola (rapeseed) area is smaller than some in industry had expected. This, and short covering, pushed May-21 Canadian canola futures to the highest price yet.

Short news:

Wheat:

Weather has moved centre-stage this week following winter storms in the US and a severe drop in temperatures seen there and across much of Northern Europe and the Black Sea region.

Russia is usually the world’s biggest wheat exporter over the July-September period. Unless the situation becomes more transparent, key importers may be forced to look elsewhere for supplies, underpinning new crop values.

Feed barley:

Feed barley markets remain quiet, and we have seen some pressure from slow demand combined with a firmer pound on the week.

New crop markets are dormant with low demand, but also little supply as the spring crop still needs to be planted.

Rapeseed:

.There’s still talk of slow harvest progress in Brazil, reported at 22% complete in Mato Gross compared with 58% on average. The line-up for vessels waiting to be loaded in Brazil is growing. Demurrage bills won’t be cheap and early yields are still disappointing.

Market reports:

UK feed wheat futures increased on 11.02.2021 to close above £200/t again for old crop contracts. May21 prices ended the day at £200.15/t, a gain of £0.50/t. Global grain markets bounced after falling to technical support levels, suggesting buyers are present at these levels.

Though wheat markets declined following the February WASDE report, freezing temperatures across key US wheat producing regions offered some support. Snow cover is lacking in some fields, with winter-kill risks present at forecast temperatures.

The Brazilian soybean crop is estimated at 133.82Mt following much-needed rainfall, according to the latest Conab report. This is up from a 133.69Mt forecast in January and the 124.84Mt harvested in 2019/20. If realized, this would be a record Brazilian production figure. Markets expect Chinese purchases of this crop to appear shortly.

With dry weather persisting in South America, reports from Buenos Aires Grain Exchange and Conab published later on 11.02.2021 will give a South American supply update and be important for maize price direction. That said, demand seems to be king at present.

The Chicago maize market continued to be weaker in overnight trading. With growth in Chinese corn stocks in Tuesday’s USDA supply and demand estimate, and the cancellation of a 132Kt export sale to an unknown destination, Chicago maize prices (May-21) are down 5.6% (down $12.40/t to $208.85, Refinitiv) since Monday night.

Short news:

. Wheat: French farm ministry raised its forecast of non-EU exports for the second consecutive month to 7.45mln t, although lower intra-EU and increased crop availability allowed ending stocks to remain stable at 2.5mln t.

. Feed Barley: Spot demand has returned to the market as severe cold weather causes disruption in Northern Europe’s inland waterways. The closure of the Mittelland Canal has halted execution out of Germany and forced buyers in the Netherlands to turn to the UK market to cover nearby commitments, putting some much needed demand back into the picture for spot shipments.

. Rapeseed: Another volatile week for CBOT soybeans which closed nearly 50 cents down yesterday after the USDA report on Tuesday. Broadly the report fell pretty much in line with trade expectations but didn’t give the bulls anything new. World ending stocks were lower 83.4mln t vs 84.31mln t in the last report, but that was within trade expectations. South American soybean production remains unchanged at 48mln t and 133mln t for Argentina and Brazil respectively.

Corn

OVERVIEW FOR 2020/21

Global production is down this month with smaller crops in Argentina and China more than offsetting a larger crop in Russia. Global consumption is boosted on higher feed consumption in China and increased food, seed, and industrial use in Russia. Global trade is also up slightly, with higher exports for Canada, the European Union, and India more than offsetting lower exports for Argentina and Russia. Higher imports for China and Jordan, meanwhile, more than offset lower imports for Algeria and the United Arab Emirates. The projected U.S. season-average farm price is raised $0.15 per bushel to $4.85.

Global corn production is forecast lower as reductions for Argentina, Brazil, the European Union, and the United States more than offset increases for China and India. Global exports are down due to cuts to Argentina and the United States. Corresponding cuts to imports in several countries result in global trade down from last month. Higher imports for China offset lower imports for the European Union. The U.S. season-average farm price is up $0.20 to $4.20 per bushel.

Wheat

WHEAT PRICES

Global: Wheat prices rose in most major exporting countries since last month’s WASDE due to the Russia export tax and stronger prices for corn and soybeans. Australia prices strengthened on stronger demand in Southeast Asia in lieu of less exportable supplies in Russia with its export restraints. The major exporters are currently all quoting prices within a very narrow range.

Argentine bids are up $27/ton to $254 and Brazilian bids are up $29/ton to $264 on continued tight nearby supplies. Black Sea bids are up $17/ton to $244 on strong demand from China. U.S. bids are up $22/ton to $240 on strong sales and shipments. U.S. bids remain the lowest of the major exporters.

MARKET FEATURES

- Argentina Reverses Course on Suspension of Corn Exports

- Strong Corn Prices to Curb Import Growth Outside of China

Oilseeds

- China Demand and Global Supply Concerns Drive U.S. Soybean Price Higher

PROJECTION FOR 2020/21

Global 2020/21 oilseed production is forecast at 594 million tons, 1 million tons below December on reduced soybean, cottonseed, and peanut production. Soybean production declined 1 million tons with reduced production in the United States, down 947,000 tons to 113 million. A 2-million-ton reduction in Argentina and lower output in Uruguay offset a similar gain in the China soybean crop. Peanut production is cut 430,000 tons on reduced U.S. and India output while cottonseed declined 296,000 tons on reduced production in the United States and Pakistan. Partially offsetting these adjustments is a 500,000-ton rise in Russia sunflowerseed production. Global oilseed exports, at 193 million tons, is raised nearly 1 million tons on increased U.S. soybean and Russia sunflowerseed exports. Oilseed crush is fractionally higher with small increases in soybean, rapeseed, and sunflowerseed crush. Global oilseed stocks are down on lower soybean stocks in the United States and Argentina, partially offset by higher stocks in China.

Protein meal and oil production, consumption, and trade are unchanged from December as all adjustments are small and offsetting. Soybean meal exports are fractionally lower with smaller Argentina trade only partially offset by higher U.S. exports. In similar fashion, reduced rapeseed meal exports by Russia are offset by increased UAE trade. Global vegetable oil stocks are up 620,000 tons on a rise in palm oil carryin from 2019/20. The projected U.S. season-average farm price for soybeans is raised $0.60 to $11.15 per bushel.

USDA, Foreign Agricultural Service