Farmers planting more soy in Argentina
That is according to the latest cereal and oilseeds market outlook from the UK’s Agriculture and Horticulture Development Board (AHDB), which we dipped into, ahead of the next WASDE release from the USDA, due December 10.
Expectations for upcoming USDA outlook:
Looking to the next WASDE report, James Webster, senior analyst, cereals and oilseeds, AHDB, told FeedNavigator he would expect to see downward revisions within that publication to Argentinian and Australian wheat production.
"We may also see an increase in Argentinian soy production in response to the export tariffs on grain imposed by the government there. If this happens, there ought to be a corresponding decline in maize.
"I wouldn’t necessarily expect the report to have a massive impact on the direction of markets, unless there is something hugely unexpected to do with South American production, Chinese demand or US production. We are in a position now where a lot of things are known."
Soybean plantings in Argentina are ahead of last year’s pace, noted the analysts. They expect soybean production in that country to increase this season in response to increased grain export taxes.
Outlook for global rapeseed and canola market
Rapeseed markets found new support last week, nearby Paris rapeseed futures hit the highest point since April 2017, at €397.00/t, said the AHDB team.
“Rapeseed futures have been supported by firmer prices in rival oils - soybean, palm and sunflower - as well as a further tightening of global rapeseed/ canola supplies in 2019/20.”
Following poor conditions during harvest, they noted that Statistics Canada has revised Canadian canola production down by 0.8Mt, to 18.6Mt, the lowest level since 2015/16.
There is tight rapeseed production in the EU and Australia, and Ukrainian exports are due to dry up in the New Year, said the analysts.
“Despite firmness in old crop markets, new crop markets have been more pressured of late with increased rapeseed planting in the Black Sea region,” they added.
Maize, wheat, and barley
In terms of maize, they said there are increased production estimates for the EU. Keen sales in Argentina, due to the potential for export taxes, and in Ukraine, is leading a continual slide in maize markets.
Minimal US exports and improving new crop conditions have pressured global wheat markets, outweighing support from further downgrades to production in Australia and Argentina, said the grain market specialists.
ABARES, Australia’s agricultural body, cut its wheat production forecast for 2019/20 to 15.9Mt from 19.1Mt in September.
The prospect for an increase in the barley planted area in 2020, not just in the UK, but also France, will likely continue to pressure prices with a large price discount to feed wheat, added the analysts.
