19 September 2018
Global grain markets continued to slide for much of last week.
The downward revisions to Australian wheat production failed to stem the bearish tone (Friday–Friday). In the US, record maize yield forecasts from the USDA were higher than market polls had anticipated.
Record yield forecasts in key maize producing US states resulted in a national record yield projection of 11.38t/ha in 2018/19 in the latest USDA report. The raised yield projection is now 3% higher than 2017/18. This increase saw forecast 2018/19 US maize production rise by 6.1Mt to 376.6Mt on the month, in turn helping to raise world maize production to 1,069Mt. This was above market expectations.
Production of wheat in Australia is set to hit an 11 year low of 19.1Mt according to the latest Australian government (ABARES) crop report released on 11 September. The forecast places wheat production 10% down on the year, and 0.9Mt below the September USDA estimate. The reduced outlook for Australian wheat production follows dry weather during planting and early yield formation.
The latest Defra June survey data on crop area for 2018 showed a 1% year on year increase in the English wheat area. Now at 1668.4Kha, the English wheat area is up by an additional 26Kha from the Defra provisional June survey wheat area figure. Additionally, as at 29 June 2018, 4% less wheat was held in store by merchants, ports and co-ops in the UK than a year earlier, according to a survey by AHDB.
Oilseeds markets were pressured last week in the US and Europe following news of increased global soyabean production and stocks. Forecast record US soyabean yields and speculation of renewed US-China talks brought mixed but overall bearish news to markets. European rapeseed markets subsequently reacted to the news out of the US and saw declines on the week.