image expired

The latest World Agricultural Supply and Demand Estimate is not good news for commodity prices. The data published yesterday by the USDA indicates record high global ending stocks of wheat 2015/16 at 219.8 million tonnes up 13% on last year. Oilseed global ending stocks although lowered from last months estimate are still 20% higher than last year.

Wheat

Global wheat supplies for 2015/16 are raised 2.2 million tons primarily on increased production in the FSU and Turkey. A 2.4-million-ton reduction in global beginning stocks partially offsets the production increase; EU accounts for over 60 percent of the reduction. World wheat production is projected at a record. Crop conditions in the spring wheat areas of Russia and Kazakhstan continue to be excellent. 

Winter wheat production in Russia and Ukraine is better than expected, particularly considering last autumn’s drought. A 1-million-ton reduction for Canada, due to drought conditions in the western prairies, is partially offsetting. Argentina production was lowered 0.4 million tons to 11.1 million.

World exports are lower with the biggest decreases for Canada (smaller crop), Argentina (smaller crop and lower carry in), and the United States. 

Global imports are also down with the biggest changes being a 1-million-ton reduction for Iran offset by a 1-million-ton increase for Morocco. Iran’s imports are reduced as a result of a newly imposed import duty and the Morocco change is from a Foreign Agricultural Service GAIN report. 

Global use is up slightly, supported by increased feed and residual use for EU, Russia, and Ukraine. With supplies growing faster than use, global ending stocks are raised 1.7 million tons to a record 221.5 million tons.

Coarse Grain

Global coarse grain supplies for 2015/16 are projected 4.8 million tons higher with a 3.0-million-ton increase in beginning stocks and a 1.8-million-ton increase in global coarse grain production. Foreign corn beginning stocks are up 3.6 million tons with increases in 2014/15 production for Brazil and Mexico and increases in 2014/15 imports for China, EU, South Korea, and Mexico. Argentina corn production is also raised for 2014/15. Foreign corn production for 2015/16 is reduced 5.5 million tons with reductions for China, EU, and Serbia, only partly offset by increases for Brazil, Ukraine, and Russia. Global barley production is higher this month with increases for Ukraine and Morocco outweighing a reduction for Canada.

Global 2015/16 coarse grain consumption is lowered slightly with a reduction in global corn use driven by reductions in corn feeding for EU, China, and Ukraine. Higher wheat feeding is expected for EU and Ukraine, and higher sorghum feeding for China. 

Global coarse grain trade is higher with corn imports raised for EU, barley imports raised for Saudi Arabia, and sorghum imports raised for China. Corn exports are raised for Ukraine, Brazil, and Russia with larger crops. Corn exports are reduced for Serbia, EU, and the United States. Barley exports are raised for Ukraine, but lowered for Canada. Sorghum exports are raised for the United States with the larger crop. 

Global coarse grain ending stocks for 2015/16 are raised this month with a 5.1-million-ton increase for corn mostly on higher stocks in the United States, Brazil, and Mexico.

Oilseed

Global oilseed production for 2015/16 is projected at 529.1 million tons, down 2.7 million tons from last month. Reductions for rapeseed, sunflowerseed, cottonseed, and peanuts more than offset an increase in soybean production. Soybean production is projected up 1.1 million tons with higher crops for the United States and Ukraine. Rapeseed production is reduced 2.6 million tons as hot and dry weather curtailed yields in Canada and the EU, while harvested area is lowered for Ukraine, Belarus, and Australia. Other changes include lower EU sunflowerseed production, and reduced cottonseed production for India and China.

Projected 2015/16 global soybean ending stocks are lowered 4.9 million tons to 86.9 million with a higher crush for China, the EU, and the United States. Despite this month’s reduction, global soybean stocks remain record high. Projected soybean imports for China in 2015/16 are increased 1.5 million tons to 79 million and up from a revised 2014/15 forecast of 77 million. Soybean exports for Brazil and Argentina are projected higher due to growth in global trade.

Full report here