US corn and soybean supplies will be slighter than earlier forecasts due to harvest shortfalls in key US production states, according to the US agriculture department’s World Agricultural Supply and Demand Estimates (WASDE) report published on Friday [October 9].
Global soybean production projections for the 2020/21 harvest are at 368.5m tons, down 1.3m tons on September’s report.
The International Grains Council (IGC) expectation for soybean in 2020/21 is at 373m tons, 4.5m tons ahead of the latest forecast from the US Department of Agriculture (USDA).
The US agency’s soybean production figures largely reflect a lowered projection for the US with it forecasting a reduction of 1.2m tons to 116.2m tons due to a lower harvested area in Kansas and North/South Dakota, said Shore Capital analysts.
Collectively, with a projected reduction in supplies in the US and higher foreign use, global projected soybean ending stocks are lowered by 4.9m tons from September’s report to 88.7m tons.
“Overall, with around 5% projected decrease in 2020/21 soybean ending stocks, a reduction in the stock-to-use ratio from 28.8% in 2019/20 to 23.9% in 2020/21 and a yield of 2.89 MT/HA on 2020/21 harvested projections, we continue to see and expect slight upward pressure on prices,” said the Shore Capital team.
“Additionally, [global] soybean ending stocks are expected to be the lowest in four years,” they noted.
Maize matters
The US agriculture department's projections for the 2020/21 harvest for global corn/maize production is 1,159m tons, which is 3.6m tons down on last month’s figures.
“This largely reflects the projected production decline in the US compared to September’s report based on a reduction in the harvest area and lower yield forecast. Furthermore, there are projected reductions from Ukraine (down 2m tons to 36.5m tons) and the EU (down 0.2m tons to 66.1m tons),“ wrote the Shore Capital team.
They added that the IGC projection of global corn production is 1,160m tons, broadly similar to the projections from USDA. The Australian Bureau of Agricultural & Resource Economics & Science (ABARES) has placed global corn production for 2020/21 at 1,187m tons. That agency also expects world corn prices to fall in 2020/21 given record world production.
The USDA also expects global corn ending stocks for the 2020/21 harvest to decrease by 6.3m tons from September’s report to 300.5m tons. This largely reflects the reduction in projected ending stocks in the US, a decrease of 8.5m tons to 55m tons, said Shore Capital.
Wheat availability
The WASDE global wheat production forecast for 2020/21 is at 773m tons, around 0.3% higher than last month’s projections, and 10m tons ahead of the IGC projection of 763m tons.
Wheat availability is still expected to remain plentiful with global ending stocks projected to increase to a new record, 321.5m tons, said those analysts.