The latest World Agricultural Supply and Demand Estimates from the USDA published today see the US wheat and corn crop shrinking from previous estimates. But global wheat supplies are projected to increase whilst course grain and oilseed supplies are projected to fall.

Wheat: U.S. wheat supplies for 2011/12 are lowered 30 million bushels (0.8 million tonnes) this month as higher forecast winter wheat production is more than offset by lower area and production for durum and other spring wheat. Total use for 2011/12 is lowered 30 million bushels with a reduced outlook for exports more than offsetting an increase in expected feed and residual use. Exports are projected down 50 million bushels with increased competition, particularly from FSU-12 countries, where production prospects are raised.

Global wheat supplies for 2011/12 are projected 11.4 million tons higher with higher beginning stocks and a sharp increase in production of 9.7 million tons with increases in FSU-12, India, China, and EU-27 more than offsetting a reduction for Argentina. Russia production for 2011/12 is raised 3.0 million tons on harvest reports for winter wheat and continued favorable weather in most of the country’s spring wheat areas. Ukraine production is increased 3.0 million tons on higher-than-expected yields; however, heavy rains during harvest have reduced this year’s crop quality. Kazakhstan production is increased 1.0 million tons on abundant spring and early summer rainfall. India wheat production is up 1.9 million tons based on the latest official government estimates. China production is raised 1.5 million tons based on the latest official government indications.  Production is increased 1.4 million tons for EU-27 with increases for France, Romania, and Bulgaria.  Harvest results from France indicate yields were hurt less by prolonged spring dryness than early reports had suggested. Partly offsetting is a 1.5-million-ton reduction in expected production for Argentina as the latest planting progress reports suggest less acreage increase this year. 

The 2011/12 outlook for world wheat trade and consumption this month is shaped by growing supplies of wheat, especially in FSU-12 and EU-27, and tighter supplies of corn in the United States. World wheat ending stocks for 2011/12 are projected 6.7 million tons higher at 188.9 million tons. Stocks are expected to decline slightly from 2010/11 with higher usage, but remain 62.9 million tons above their recent low in 2007/08.

Coarse grains: U.S. feed grain supplies for 2011/12 are projected lower this month with sharp drops in forecast corn and sorghum production. Corn production for 2011/12 is forecast 556 million bushels (14 million tonnes) lower with a reduction in harvested area and lower expected yields. The national average yield is forecast at 153.0 bushels per acre, down 5.7 bushels from last month’s projection as unusually high temperatures and below average precipitation during July across much of the Corn Belt sharply reduced yield prospects. 

Global coarse grain supplies for 2011/12 are projected lower with a 3.6 million ton increase in beginning stocks more than offset by a 14.0-million-ton reduction in output. The decline in global production is driven by reduced corn and sorghum production in the United States with foreign corn, barley, and oats production all expected higher. Corn production is raised for Brazil, Ukraine, and EU-27, but lowered for Egypt. Barley production is raised for Ukraine and Argentina, but lowered for EU-27. World oats production is raised slightly with an increase for EU-27. World rye production is reduced with a smaller expected crop for EU-27.

Oilseeds: U.S. oilseed production for 2011/12 is projected at 91.7 million tons, down 4.7 million from last month. Soybean, canola, and sunflower seed production are all projected lower. Soybean supplies for 2011/12 are reduced as lower forecast production is only partly offset by higher beginning stocks. Soybean production for 2011/12 is projected at 3.056 billion bushels (80 million tonnes), down 4.5 million tonnes due to lower harvested area and yields.

Global oilseed production for 2011/12 is projected at 451.4 million tons, down 4.1 million tons from last month mostly due to a reduction in the U.S. soybean crop. Reductions for soybeans, rapeseed, and cottonseed are only partly offset by increased sunflower seed and peanut production. Lower soybean production is projected for the United States, China, and Ukraine. China’s production is projected at 14 million tons, down 0.3 million due to reduced harvested area. Brazil's soybean production is projected at 73.5 million tons, up 1 million due to higher expected yield. Production for Brazil’s 2010/11 crop is also raised this month to a record 75.5 million tons based on record yields. Rapeseed production is reduced for Ukraine and Belarus reflecting lower yield prospects for both countries. Other changes include higher sunflower seed production for EU-27, higher rapeseed production for Australia, higher peanut production for China, and lower cottonseed production for Brazil.

Full report here