Wheat prices dipped despite the USDA in its monthly Wasde crop report cutting further its forecast for world carryout stocks in 2024/25.
The downgrade reflected the knock-on effects of downgraded estimates for Russian and Ukrainian harvests.
However, weather maps markedly increased the extent of rainfall expected in southern Russia over the next week, if limiting rain relief expected in Ukraine.
Wheat futures for July-24 stood down 1.8% in Chicago in lunchtime deals, if comfortably above levels before the Wasde.
In Paris, the September-24 milling wheat contract shed 2.6%, and London November-24 feed wheat 2.5%, with pressure enhanced by gains in sterling and in particular the euro, making European exports less competitive.
Corn
The USDA trimmed its forecast for world corn stocks at the close of 2024/25 by 1.5Mt to 310.8Mt, representing a modest drawdown year on year.
The downgrade reflected in part a cut of 500Kt, to 1.5Mt, in the forecast for Russia’s inventories at the close of next season, on a reduced area estimate.
The forecast for South African stocks at the close of 2024/25 was also reduced, on a raised estimate for exports this season, reflecting brisk “regional demand”.
For the US, 2024/25 balance sheet forecasts were left unchanged, including an estimate for stocks to close the season at 2.10Bn bushels (53.4Mt). Investors had expected a small downgrade in the figure, to 2.09Bn bushels.
Soybeans
The forecast for US soybean stocks at the end of 2024/25 was nudged 10M bushels higher to 455M bushels (12.4Mt), close to market expectations.
The revision reflected an increased forecast for carry-in stocks, on a reduced US crush estimate amid some disappointing in domestic soymeal demand.
The world soybean balance sheet for 2024/25 attracted few other major revisions, although the estimate for Brazil’s 2023/24 production was reduced by 1.0Mt to 153.0Mt on losses to inundations in the southern state of Rio Grande do Sul.
Wheat
The USDA cut by 5.0Mt to 83.0Mt its forecast for Russia’s wheat harvest this year, citing losses in the winter crop to “a recent freeze, followed by hot, dry weather”.
“The Russia supply situation is of critical concern,” the USDA added, noting that “the smaller crop and tighter beginning stocks will constrain exportable supplies”.
Russian wheat exports in 2024/25 were pegged at 48.0Mt, a downgrade of 4.0Mt from last month’s estimate, and a drop of 6.0Mt year on year.
Expectations for Ukraine’s wheat exports were cut too, by 1.0Mt to 13.0Mt, on a harvest downgraded by 1.5Mt to 19.5Mt, as “the lack of adequate precipitation during the month of May further reduced the already short soil moisture reserves for the flowering-to-filling crop”.
Black Sea export losses were seen as being picked up in part by the US, for which the shipment forecast was upgraded by 700Kt to 21.8Kt, more than offsetting the boost to supplies from a 500Kt upgrade to 51.0Mt in the estimate for the ongoing harvest.
However, the EU was seen as picking up orders too, with the bloc’s exports seen at 35.0Mt, a 1.0Mt upgrade. Coupled with a cut of 1.5Mt to the forecast for harvest-24, and a reduced figure for carry-ins stocks, and the estimate for EU stocks at the close of 2024/25 was downgraded by 3.0Mt to 11.4Mt.
The USDA said that “rain continues to cause difficulties for the French wheat crop”, adding that “French farmers have experienced planting delays, less sown area, emergence issues, and few windows with dry weather for allowing input activities in the fields.
“While frequent rainfall has contributed to vigorous vegetative growth, concerns about the effects of excessive rainfall is now apparent in France as well as other nearby countries such as the United Kingdom and Germany.”
The forecast for the UK’s wheat harvest-24 was downgraded by 350Kt to 10.9Mt.
The USDA cut its forecast for world wheat stocks at the close of 2024/25 by 1.3Mt to a nine-year low of 252.3Mt.
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In December 2023, we published our 2024 outlook and forecasts. As another year draws to a close, its time to take a look at those forecasts and how accurate they were.
Highlights: • Rapeseed - Demand downgrade weakens case for price support • Soybeans - Brazil’s harvest and Donald Trump weigh on prices • Crop Watch - Argentine and Brazilian crop condition