Global wheat production will hit a new record for the 2020/2021 season, the United States Department of Agriculture expects in the latest WASDE report. Australia, Russia and Canada have the largest share of this. There are also changes in the expected production of soybeans. What does this do to the quotes?
The US Department of Agriculture (USDA) projects that global wheat production will reach approximately 773,7 million tons, a new record. The largest share of this increase is due to Australia. The harvest in that country was increased by 1,5 million tons last week to 30 million tons. The wheat harvest is also considerably higher in Russia and Canada, at 84 million tons and 35,2 million tons respectively. The three countries all achieved the second largest harvest ever. Due to the significant increase in production, stocks will increase by 3 million tons to 1,2 billion tons, according to the USDA.
Not only production is increasing, consumption is also higher, according to the ministry. It recorded an increase of 5,1 million tonnes to 757,8 million tonnes. China and the European Union in particular purchase a lot of product. For China, consumption has increased by 3 million tons to 24 million tons. Pakistan is also purchasing considerably more wheat (the country has already purchased about 500.000 tons) in order to build up stocks. It aims to combat food price inflation. Imports to this country are expected to reach 2,5 million tonnes, the highest level since the 2008/2009 season.
Finally, global ending stocks for the 2020/2021 season are expected to decrease by 3,9 million tons to 316,5 million tons. Of this, China and India hold 51% and 10% respectively. Closing stocks in the United States fell to 23,4 million tonnes, mainly due to lower imports. As a result, the quotation on the CBoT in Chicago shows an increase again and amounts to $5,90 per bushel.
Fewer soybeans on the market
Global soybean production has been reduced by 0,6 million tons to 362 million tons in the USDA report. In particular, the higher production figures in Canada and Uruguay are offset by lower production in Argentina: -1 million tons to 50 million tons. The lower yield in Argentina does support the export of soybeans from the United States. With the above in mind, global oilseed production drops to 595,7 million tons. The closing stock is estimated at 97,8 million tons, a decrease of approximately 0,8 million tons compared to last month.
While global soy production is declining, American yields have increased by more than 400.000 tons to 57,1 million tons. The US ending stock of soybeans is currently estimated at 4,7 million tons. As a result of higher production, the quotation on the CBoT shows a small decrease. This puts the quotation in week 50 at $11,52 per bushel, a price that is still well above the 5-year average of $9,30 per bushel.