At 378.47MT, the US Department of Agriculture (USDA) reduced production by 9.61MT, consumption has also been reduced following the continued depressed ethanol market, with consumption down 5.09MT.
“With a continued depressed US ethanol market, attention will now focus on demand,” he said.
EU corn production is lowered, mostly reflecting a reduction for Romania. Ukraine corn production is down, as acute short-term drought across much of the primary growing areas lowered corn yield prospects after a favorable start to the summer growing season. Corn production is raised for Brazil, as high domestic prices are expected to support an expansion in area. Corn production is also increased for India and Nigeria.
Meanwhile, barley production is raised for Russia, the EU and Australia.
Wheat forecast
The September World Agricultural Supply and Demand Estimates (WASDE) report has proved to be conservative in estimates for Russian wheat production, maintaining an estimate of 78MT.
“We maintain a view that production will be close to 81MT, with further USDA increases likely in October,” Collier told us.
The approach for Australia and Argentina, however, is now more in line with market expectations, upping the Australian production estimates to 28.5MT, although below the forecast of Australian organization, ABARES, of 28.9MT, he said.
Argentina has been cut to 19.5MT, in line with our expectation following the dry period and frost damage, added the analyst.
Oilseeds outlook
US soybean production has proved to be more resilient than corn, with the USDA trimming production by 3.04MT and maintaining exports at 57.83MT.
"The maintaining of exports is important in the context of recent rapid sales to China, quicker sales do not necessarily mean overall increased demand," said Collier.
Estimates for Brazil have also been increased to 133MT, as profitability in South America has incentivized an increased area, he noted.
The WASDE report for September can be accessed here.
