The WASDE report from the United States Department of Agriculture (USDA) this month focuses mainly on declining corn yields in the United States. Although this was not unforeseen, due to the summer storm in mid-August, the decline is larger than many market analysts had expected. As a result, the listing moves up.
According to the USDA, the American wheat harvest will amount to 1,8 billion bushels, which is equal to expectations last month. The outlook for the global wheat market is determined by higher yields, increased consumption, more exports and larger ending stocks. The USDA increased global production by 4,5 million tons to 770,5 million tons. Mainly due to higher production in Australia (+2,5 million to 28,5 million tons) and Canada (+2 million to 36 million tons). In contrast, the ministry predicts a decrease of 1 million tons (to 19,5 million tons) for Argentina due to persistent drought and frost damage.
Wheat supplies to record
Due to expected higher exports from Australia and Canada, the USDA has increased global exports by 1,5 million tons to 189,4 million tons. On the other hand, China is expected to import considerably more wheat in the 2020/2021 season: +1 million tons, up to 7 million tons. This means that the country can achieve the largest import since the 1995/1996 season. Expected global ending stocks for wheat have been increased by 2,6 million tonnes to a record 319,4 million tonnes.
US corn harvest sharply down
The American corn harvest has been significantly reduced. According to the USDA, the yield this season will be more than 10 million tons lower than previously predicted, at 378,5 million tons. The reduction does not come as a surprise, because a large number of corn plots were destroyed by the storm in mid-August. However, the reduction was larger than many market analysts expected. In addition, another part of the country is experiencing heat and drought, which has lowered expectations even further. It is still not a bad harvest because in 2018 and 2019 less corn was harvested with 364 million tons and 346 million tons respectively.
Expected corn exports have been increased by 2,5 million tons by the USDA, mainly due to lower stocks in competing countries. With supply falling faster than consumption, the country's ending stocks of corn have been reduced by 6,4 million tonnes compared to last month. The USDA figures immediately led to an increase in corn prices on the CBoT in Chicago. The price rose to $11 per bushel on Friday, September 3,65.
A lower harvest of grain maize is again expected for the European Union, to a total of 162 million tons. Mainly due to a lower harvest in Romania. Corn production for Brazil is actually being increased as high domestic prices are expected to support an expansion of the area.
Soybean harvest also smaller
The American soybean harvest is also estimated to be smaller: Minus 3 million tons, to 117 million tons. The harvest is still significantly above the 2019 level (97 million), but is lower than the 120 million tons harvested in 2018. Ending stocks of U.S. soybeans are estimated at 12,5 million tons. A decrease of 4 million compared to expectations last month. The new data has given the quotation for soy on the CBoT a significant boost. This ended Friday, September 11 at $10,05 per bushel.
Increases are visible worldwide for the soybean harvest. In Brazil, for example, yield is expected to increase by 2 million tons to 113 million tons. Particularly due to an increase in the area. Global soybean exports increased by 0,9 million tons to 166,3 million tons. Global closing stocks have been reduced by 1,8 million tonnes to 93,6 million.