17 January 2018
With much of the week spent waiting in anticipation of the release of a raft of USDA reports, most markets remained relatively stable until the publications on Friday (12 January).
The bearish tone of the published data regarding wheat and maize and oilseeds subsequently led to price falls. Meanwhile, Oilseed market declines follow a reminder that despite recent weather concerns in South America, there are still expected to be large global soyabean supplies.
The USDA World Agricultural Supply and Demand Estimates (WASDE) report showed an upward revision to world wheat production in 2017/18. This was mostly driven by an upward revision to the size of the Russian wheat crop of 2Mt. Russian production now stands at 85Mt, with global wheat production at 757.01Mt. However, with a 2.61Mt reduction in global beginning stocks, wheat ending stocks for 2017/18 have been marginally reduced. Maize ending stocks were revised upward, both globally and for the US, to 206.57Mt and 62.93Mt respectively, largely driven by a reduction in consumption.
The USDA’s Winter Wheat Seedings report, surprised the market somewhat as the 2018 US winter wheat area was estimated higher than expected. The average trade estimate according to a Reuters’ poll expected the 2018 area to fall by 4%, compared with last year, to 12.7Mha. However, at 13.2Mha, the USDA estimated the 2018 US winter wheat area to fall by just 0.7%. Nevertheless, the estimated winter wheat area is the lowest since 1909.
The USDA US Quarterly Stocks report showed maize stocks as of 1 December up by 1% year on year at 318Mt. However, all wheat stocks were down 10% year on year at 51Mt. The reduction in stocks however, in terms of market impact has been outweighed by the larger than expected wheat area in the seedings report. US soyabean stocks as at 1 December 2017 were a record 85.9Mt (USDA). This figure is 9% higher year on year but was below the average trade estimate (86.6Mt) in a pre-report Reuters’ poll.
The Rosario grains exchange has reduced its forecast of Argentine soyabean production in 2017/18 to 52.0Mt from 54.5Mt.
Dry weather in the country means that not all of the potential area could be planted. If the latest forecast is realised, it would be the smallest Argentine soyabean crop since 2012/13.
However, in its latest estimates, Conab have pegged the 2017/18 soyabean area in Brazil at 34.9Mha, up 3.2% year on year. Production this season is estimated at 110.4Mt. While this is 1.2Mt higher than their previous estimate in December, it is 3.7Mt (3.2%) lower year on year.
The final results from the Early Bird Survey of UK cropping intentions for harvest 2018 have now been released. Nationally, the area of wheat is forecast down 2% (at 1.75Mha) year on year. The UK winter barley area is pegged down 9% year on year, while spring barley cropping is forecast to be up 7%. The survey also estimates an 11% increase in the UK rapeseed area in 2018 compared with the harvest 2017 area. At 622Kha, however, the area would still be 18% below the high set in 2012.