In its latest World Agricultural Supply and Demand Estimates (WASDE) report, released yesterday, the USDA raised world wheat stocks by about 2.6m tons for 2015-16, based on both large beginning stocks and boosted production.
The amount of US wheat remained steady, said the USDA authors, and increases in the export of hard red winter wheat offset a 10m bushel reduction in the export of hard red spring wheat.
Global wheat production levels remain record high, with the overall amount being increased to 734.9m tons, they said. Large increases for the EU and Canada partially offset by decreases for Argentina and Ukraine.
Wheat trade is expecting to increase by about 1.3m tons stemming from increased supply, demand and policy changes in Argentina, said officials.
However, total world consumption is down about 0.2m tons, they said, with a large decrease in feed wheat use in Europe being partially offset by an uptick in use by countries including Indonesia and Thailand.
The US has the highest ending stocks for corn since 2009 and for soybeans in several years.
US feed prices
Kim Anderson, professor in the department of agricultural economics at Oklahoma State University, told us there are few indications that US feed prices will increase any time soon given current supplies.
“Prices are low, and without some problems with foreign production in future months, there isn’t much out there to make prices go higher from a supply side,” he said.
The value of the dollar has increased and had a major influence on the export market.
Additionally, there are political changes afoot in Argentina: “The new president has said he will do away with the export tax, and that will lower the cost of soybeans from Argentina relative to the dollar,” said Anderson. “That’s another factor that’s going to impact export demand for any exportable commodity.”
Soybeans
Soybean supply and use projections for 2015-16 are unchanged from last month, said the USDA.
“Soybean ending stocks are unchanged at 465 million bushels which, if realized, would be the highest since 2006-07.”
But global soybean production for 2015-16 is expected to drop by about 0.9m tons based on reductions to the crop in India, wrote USDA officials. Additional crop growth in Canada, Russia and the Ukraine are thought to partially offset the drop.
Soybean imports in Pakistan, Taiwan and Iran are anticipated to increase, added the agency.
Corn and sorghum
US corn ending stocks have been increased by 25m bushels to 1.78bn bushels.
“The projected range for the season-average corn farm price is unchanged at $3.35 to $3.95 per bushel, in line with prices reported to date and current futures price levels,” they added.
The amount of corn used for ethanol production is anticipated to grow by about 25m bushels for 2015/16, wrote the USDA authors.
Corn exports have been dropped by about 50m bushels, with the expectation of larger exports from Canada and Brazil, according to the US agency.
“Brazil corn exports for 2014/15 (March 2015 through February 2016) are raised 1.0 million tons to a record 32.0 million putting additional pressure on 2015/16 U.S. corn exports (September 2015 through August 2016),” wrote the USDA team. “Global corn ending stocks for 2015/16 are nearly unchanged with higher projected stocks for the United States and Canada offset by lower projected stocks for Brazil and EU.”
Global corn production is expected to dip by 1m tons, with reduced production in India and South Africa, reported the USDA. These decreases are somewhat balanced by additional production from Canada.
“Global coarse grain consumption for 2015/16 is lowered slightly,” they said. “Global corn consumption is lowered 1.0 million tons mostly reflecting lower use in India and Taiwan. Corn use is increased for EU and Chile.”
Sorghum prices have been dropped by 10 cents for a predicted range of $3.20 to $3.80, stemming from dampened interior cash sorghum bids, according to the USDA.