The agency’s latest WASDE report sees a decline in global soybean production for 2019/20, but it left world totals for wheat unchanged and global corn [maize] production, when drawing comparisons with last month’s report, was raised, but only slightly.
“Interestingly, Chinese soybean imports were increased 1MM tons to 89MMT, which is nearly 60% of the imports in the world, against 82.5MMT last year. Brazil is the biggest winner of the US-China trade dispute with exports seen at a record 78.5MMT, some 30MMT above the US exports – a record.
“Medium term though, we could see China sourcing more of its imports in the US and as such, stocks are expected to tighten in 2020/21. Something to consider as well, because of the lack of DDGs, due to record low ethanol production, more soybean meal would likely be used,” Benjamin Bodart, Director at CRM AgriCommodities, told FeedNavigator.
Outlook
Soybean
The WASDE report sees soybean 2019/20 world production lower by 3.7MMT on last month to 338.1MMT because of a combined 3.5MMT reduction in the Brazilian (-1.5MMT) and Argentine (-2.0MMT) soybean production estimates pegged at 124.5MMT (record) and 52.0MMT respectively.
Coupled with a 1MMT reduction in the beginning stocks and despite a 1.6MMT decline in consumption, global stocks were 2MMT lower month-on-month to 100.5MMT, which is a reduction of 10.4MMT on 2018/19.
Wheat
The USDA report let wheat 2019/20 world production unchanged on last month, at a record 764.5MMT compared to 731.5MMT last year.
Global wheat exports were lowered 0.9MMT with the EU's up 1.5MMT to 33.5MMT while Russian exports were lowered 1.5MMT to 33.5MMT.
Ending stocks were raised 5.6MMT on last month to a record 292.8MMT compared to 278.1MMT last year due to a steep 5.2MMT yearly reduction in demand - 51% of the world wheat stocks are in China.
Additionally, the stock-to-use ratio of the top eight exporters is seen at only 24.8%, which is the lowest since 2013/14.
“Now the USDA WASDE report is out of the way, it is back to trading weather which is rather concerning in both Western Europe and southern Russia, where it is too dry,” commented Bodart.
Corn
In terms of corn, the USDA raised 2019/20 world production by 1MMT on last month to 1,113.0MMT, but that is down 10.6MMT on last year.
The Brazilian and Argentine production estimates were left unchanged at 101MMT and 50MMT respectively. Despite a 3.5MMT increase in feed use, the total consumption was pegged at 1130.8MMT, still a record, but a reduction of 5MMT on last month.
"The key figure was really the steep 9.5MMT or 375Mbu reduction in US corn use for ethanol due to the destroyed ethanol industry over low fossil fuel prices. The US agency could reduce it further in the months ahead. As a result, world stocks were raised 5.8MMT month-on-month to 303.2MMT vs 320.9MMT last year. More than 65% of the corn stocks are in China,” added Bodart.
