05 March 20189 min reading

The reports awaited by companies, academics, and journalists following the grain market were announced. World Agricultural Supply and Demand Estimates (WASDE) report by The United States Department of Agriculture (USDA) was published on the website of the institution. According to the report, at the end of the 2017/18 season, global wheat stocks are expected to decrease. According to the monthly cereal report of the International Grains Council (IGC), another reported followed by the sector, this season grain production will be slightly below last year.


According to USDA report, projected 2017/18 U.S. wheat ending stocks are raised 29 million bushels on increased supplies and decreased use. Seed use is lowered 4 million bushels on the winter wheat planted area released today in the NASS Winter Wheat and Canola Seedings report. Wheat feed and residual use for 2017/18 is lowered 20 million bushels and reflects disappearance for June - November as indicated by the December 1 and revised September 1 stocks released in the NASS Grain Stocks report. All wheat exports are unchanged at 975 million bushels; however, a 10 million bushel decrease in Hard Red Spring exports is offset by 5-million-bushel increases each for Soft Red Winter and White wheat. Total supplies are raised 5 million bushels on higher imports while production and the season-average farm price are unchanged. Global wheat supplies for 2017/18 are lowered 0.8 million tons on reduced beginning stocks, more than offsetting increased production. World beginning stocks are lowered 2.6 million tons mostly on a large 2016/17 production cut for Australia, reflecting updated Australia Bureau of Statistics data. World production for 2017/18 is raised 1.8 million tons led by a 2.0-million-ton increase for Russia and a 0.8-million-ton increased for Pakistan. Partially offsetting is a 0.9-million-ton reduction for the EU. All these production changes reflect updated government data. Global exports are lowered 1.3 million tons led by reductions for Australia and the EU that reflect decreased supplies and increase market competition. Russian exports, in contrast, are raised 1.5 million tons to a record 35.0 million on increased supplies and competitive prices. Global use for 2017/18 is lowered fractionally and ending stocks are lowered 0.4 million tons to 268.0 million, which remain record large.

RECORD YIELD IS EXPECTED FOR CORN According to WASDE, This month’s 2017/18 U.S. corn outlook is for larger production, increased food, seed, and industrial use (FSI), lower feed and residual use, and greater stocks. Corn production is estimated at 14.604 billion bushels, up 26 million from last month as an increase in yield to a record 176.6 bushels per acre is partially offset by a 0.4-millionacre reduction in harvested area. Among the major producing states, yields are estimated to be record high in Illinois, Minnesota, and Ohio. FSI is raised 10 million bushels, reflecting an estimated amount of corn used for glucose and dextrose during September-November that was above expectations. Feed and residual use is down 25 million bushels to 5,550 million based on indicated disappearance during September-November as reflected by the December 1 stocks. With supply rising and use falling, corn stocks are up 40 million bushels from last month. The season-average corn price received by producers is projected at $3.25 per bushel, up 5 cents at the midpoint based on observed prices to date.

Sorghum production for 2017/18 is estimated 8 million bushels higher as an increase in yield to 72.1 bushels per acre more than offsets a marginal reduction in harvested area. Grain sorghum prices are forecast at $3.15 per bushel, up 5 cents at the midpoint.

Global coarse grain production for 2017/18 is forecast 0.3 million tons higher to 1,324.2 million. This month’s 2017/18 foreign coarse grain outlook is for lower production and consumption and greater trade relative to last month. Foreign corn production is forecast lower with reductions for Russia, Vietnam and the Philippines more than offsetting an increase for Pakistan. Russia’s corn production is down based on harvest results to date. Vietnam corn production is reduced as the impact of heavy rain during the growing season in the northern production area was worse than previously expected. Barley production is down as a reduction for Russia more than offsets an increase for Argentina.

Major global trade changes for 2017/18 include lower corn exports for Russia, partially offset by an increase for Thailand. Brazil’s 2016/17 corn exports are reduced based on observed shipments to date for the local marketing year that started in March 2017. Imports for 2017/18 are lowered for Iran but increased for Vietnam and the Philippines. Foreign corn ending stocks are higher than last month, mostly reflecting increases for Brazil and Pakistan. Global corn stocks, at 206.6 million, are up 2.5 million from last month.

RICE PRODUCTION TO FALL BY %20 IN US According to the figures published by USDA, U.S. 2017/18 all rice production is 178.2 million cwt, down fractionally from the previous estimate and down 20 percent from last year. The all rice average yield is estimated at 7,507 pounds per acre, up 46 pounds from the prior estimate. Long-grain production is raised to 127.9 million cwt and medium- and short-grain production is lowered to 50.4 million. All rice domestic and residual usage is increased by 5.0 million cwt to 120.0 million on higher-than-expected usage for August-November as implied by the NASS Rice Stocks report. Projected U.S. all rice exports are reduced by 3.0 million cwt to 100.0 million, all for long-grain on slower-than-expected exports to Western Hemisphere markets. Projected 2017/18 all rice ending stocks are reduced 1.8 million cwt to 29.2 million, the lowest level since 2003/04. The projected 2017/18 season-average farm price for all rice is reduced 20 cents at both ends of the range to $12.10 to $13.10 per cwt, primarily due to lower-than-expected long-grain prices reported to date by NASS.

Global 2017/18 rice supplies are increased by 1.3 million tons to 622.8 million, primarily on larger crops for the Philippines and Pakistan. Philippine rice production is projected at a record 12.0 million tons, mainly on larger harvested area, also a record. World 2017/18 consumption increases 1.0 million tons to 481.8 million on higher expected usage in China, Ecuador, Nigeria, Vietnam, and the United States. Global 2017/18 trade is raised to 45.8 million tons on higher exports by China and India more than offsetting lower U.S exports. Trade is slightly below the 2016/17 record of 46.0 million tons. World ending stocks are projected fractionally higher to 141.1 million tons for 2017/18 and are at the highest level since 2000/01 with China holding over 66 percent of total stocks.

OILSEED PRODUCTION SLIGHTLY INCREASES USDA releases that, global oilseed production is projected at 580.1 million tons, up 0.5 million. Soybean production is raised 0.1 million tons to 348.6 million on gains for Brazil and the EU that are partly offset by lower production for Argentina and the United States. The Brazil soybean crop is increased 2 million tons to 110 million reflecting higher yield estimates in recent government reports. Soybean production for Argentina is reduced 1 million tons to 56 million on lower area planted to date, particularly in northern Argentina. Other changes include higher rapeseed production for Ukraine and lower sunflowerseed production for Argentina.

Global oilseed trade for 2017/18 is projected at 176.0 million tons, down 0.4 million from last month. Lower U.S. soybean and Australian rapeseed shipments are partly offset by increased soybean exports for Brazil and rapeseed for Ukraine. Global oilseed ending stocks are projected at 111.2 million tons, up 0.4 million mainly on higher soybean stocks for Brazil and the United States and higher rapeseed stocks for Australia. Partly offsetting are lower soybean stocks for Argentina and sunflowerseed stocks for the EU.

INTERNATIONAL GRAINS COUNCIL: 2 BILLION 100 THOUSAND TONS OF GRAIN TO BE PRODUCED THIS SEASON IGC’s report quotes that, at 2,100m t, the forecast for global total grains (wheat and coarse grains) production in 2017/18 is 21m higher m/m (month-on-month) and only 2% less than last season’s record. Most of the change is for wheat (including for Russia, Canada, Argentina and Australia) and maize (the EU, the USA, China, Nigeria and Ethiopia). Mainly because of adjustments to historical figures for maize in China, the forecast for world total grains stocks is boosted sharply from before, to 617m t, although this still represents the first contraction in five years (-5m). The projection for trade is up by 1m t, at 360m, an increase of 2% y/y (year-on-year).

GLOBAL WHEAT STOCKS TO DECREASE A 2% fall in world wheat production is projected in 2018/19, to 742m t, and given likely firm demand, the first drawdown of stocks is predicted since 2012/13. Trade is seen at a record, bolstered by growing import needs in Africa and Asia, including in India.

SOYBEAN PRODUCTION TO DECREASE BY 1 MILLION TONS According the report published by International Grains Council, with improving prospects for Brazil’s outturn more than offsetting marginal downgrades for Argentina and the USA, the 2017/18 world soybean production forecast is lifted by 1m t, to 349m, fractionally short of the previous year’s high. Due to a reduced figure for opening stocks and with consumption unchanged from before, global inventories are cut slightly, to 40m t. This represents a modest y/y contraction, with major exporters’ reserves down by 11%. Trade is forecast little changed from previously, at a peak of 153m t, underpinned by growing sales to markets in Asia.

RICE ESTIMATES REVISED According to the report announced by International Grains Council, reflecting upgrades for some producers, including China, the outlook for world rice output in 2017/18 is lifted by 2m t, to 484m, fractionally lower y/y. According to the released statistics, together with a larger figure for carry-ins, the overall increase in supplies is channeled to higher consumption, mainly in Africa, and ending stocks, which are placed at 123m t, down by 1% y/y. In part due to firmer than anticipated buying in the latter stages of the prior year, trade in 2018 is placed up slightly from November, at 43.8m t, a marginal y/y fall but still the second largest on record.

Significant points in the grain report of Internatıonal Grains Council are listed as follows: • Total grains production in 2017/18 is expected to be only modestly below the record of the year before. • As demand growth is forecast to exceed the increase in total supply, grains stocks are projected to fall for the first time in five seasons. • Led by higher maize shipments, grains trade is predicted to expand to a new peak. • China’s soybean imports are anticipated to total at least 100m t, as global trade advances by 4% y/y, to a record. • World rice stocks are seen slightly tighter y/y as accumulation in China only partially compensates for a drop in the major exporters.

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