WASDE: Increase in US corn yields not good for prices
US wheat, corn and soybean production forecasts and reports are up, while EU wheat, barley and corn yields are reported to be down.
The United States Department of Agriculture (USDA) published its World Agriculture Supply and Demand Estimates (WASDE) report yesterday, Wednesday, August 12.
US wheat production was increased by 14 million bushels as hard red spring wheat and durum wheat production offset declines in winter wheat production. The country may also have the lowest ending stocks for wheat in six years.
Outside of the US, wheat production was lowered by 3.7 million tonnes in the report. The EU is set to produce 4 million tonnes less this season, while production in Kazakhstan and Turkey is also set to be down by approximately 1 million tonnes in each country.
Production increases are expected in Russia (1.5 million tonne increase) and Brazil (1.1 million tonne increase).
World ending stocks of wheat were increased by 2 million tonnes in the report to 316.8 million tonnes as global use decreased more than supply.
The US increased its corn production forecast in the report by 278 million bushels since July. This brings the production forecast to 15.3 billion bushels. The increase in corn production will not help grain prices worldwide.
It should be noted that the report is based on conditions as of August 1 and states that “any potential impacts from severe weather that occurred after August 1 will be reflected in future reports”.
The full effects of a storm which hit some of the main US corn producing states on Monday, August 11, will become clearer in the coming days.
The first survey-based yield forecast of the year placed corn at a record 181.8 bu/ac. Record-high yields are expected in Minnesota and South Dakota according to the report, while Illinois, Indiana, Iowa, Missouri, Nebraska and Ohio were all forecast to have yields above last season before stormy winds hit some of these states.
Away from the US, the report states that the outlook for foreign grain production is for “lower production, slightly higher trade and reduced stocks relative to last month”.
The report lowered the forecast for EU corn production due to decreases in Romania and France.
The report placed an increased planted area as the main reason for a production increase in Ukraine.
Corn production was also forecast to reduce in Canada.
Barley production was forecast to decrease in the EU, Kazakhstan, Argentina and Ukraine in the report.
Oilseed production and use were forecast higher in the report while ending stocks are predicted to be lower.
US oilseed production is expected to be higher, but foreign oilseed production is expected to decline by 1.7 million tonnes to 479.6 million tonnes. This was mainly reported to be due to lower rapeseed and sunflowerseed crops.
The first survey-based soybean yield forecast in the US was placed at 53.3bu/ac, which is 5.9 bushels above last season. US soybean stocks are reported to be up 185 million bushels from last month.