| Soybean futures headed for their first close below $10.00/Bu in nearly four years, dragging rapeseed lower too, after the USDA hiked further its forecast for record world stocks. The USDA, in its much-watched monthly Wasde crop report, raised its forecast for world soybean inventories by far more than investors had expected. Best-traded Chicago soybean futures for November-24 stood 2.1% lower in lunchtime trading, leading prices to their lowest level on a spot basis since September 2020. In Paris, rapeseed futures for November-24 settled 1.0% down, although remaining above their 200-day moving average. For wheat, the Wasde was on the face of it mildly supportive to prices, cutting expectations for world stocks, including inventories held by major exporters. Nonetheless, prices remained in the red, feeling pressure from Black Sea offers to an Egyptian tender which were well below those from Western origins. Egypt’s Gasc overall received offers for more than 100 cargos for its tender, which sought up to 3.8Mt for delivery between October and April. Corn futures recovered from small losses ahead of the Wasde to post a 1.4% gain, after the report raised the forecast for the US harvest by less than had been expected. Below, further details on the Wasde’s main changes. Corn For corn, the USDA lifted its forecast for the domestic yield by 2.1 bushels per acre (0.13t/ha) to a record high of 183.1 bushels per acre (11.49t/ha), more than the market had expected, citing improved results in states including top producers Iowa and Illinois. However, the boost to the US production forecast was offset in part on a cut to the acreage estimate, of some 800K acres “based on a thorough review of all available data”. The harvest was upgraded by 1.2Mt to 384.7Mt, about 1Mt above the level pencilled in by traders. Nonetheless, the USDA forecast for US corn stocks at the close of 2024/25 was downgraded by 600Kt to 52.7Mt, short of traders’ expectations, on increased export estimates both for the coming season and 2023/24, “reflecting US export competitiveness and relatively low world market prices”. At the global level, the USDA cut its estimate for Argentina’s disease-hit 2023/24 corn crop by 2.0Mt to 50.0Mt. For 2024/25, forecasts were downgraded for Europe through the Black Sea, by a total of some 5Mt. “Extreme heat and dryness in southeastern Europe and the Southern and North Caucasus districts of Russia during the month of July reduce yield prospects,” the USDA said, adding that for Ukraine too “yield is forecast lower based on heat and dryness in key corn regions during July”. Nonetheless, with world consumption expectations downgraded too, notably for the EU, the forecast for global carryout stocks at the end of 2024/25 was trimmed by a modest 1.5Mt, to 310.2Mt, still showing small expansion year on year. Soybeans For soybeans, the USDA lifted its forecast for the US harvest this year by 4.2Mt to 124.9Mt, some 3Mt above the figures that traders had pencilled in, and promoting the crop to a record high. The revision reflected larger-than-expected upgrades to estimates for both area and yield, which was now seen coming in at a record 3.58t/ha. US soybean stocks were forecast ending 2024/25 at 15.2Mt, an upgrade of 3.4Mt, and a six-year high. The market had expected a figure of about 13.7Mt. The USDA downgraded its forecast for average 2024/25 prices by $0.30/Bu to $10.80/Bu, matching the total for 2020/21, and down from this season’s $12.50/Bu. Few changes were made to soybean balance sheets elsewhere, with a 500Kt cut to the 2023/24 Argentina harvest, and a 300Kt upgrade to 14.6Mt in the forecast for EU imports in 2024/25, among the more notable changes. Nonetheless, factoring in the enhanced US stocks, the forecast for world inventories at the close of 2024/25 was hiked by 6.5Mt, to 134.3Mt – more than 20Mt ahead of the existing record set in 2018/19, and some 6Mt ahead of the market’s forecast too. Wheat The forecast for world wheat stocks at the close of 2024/25, trimmed by 600Kt to a nine-year low of 256.6Mt, was revised close to market expectations. While the USDA cut its forecast for EU all-wheat production by 2.0Mt to a four-year low of 128.0Mt, highlighting the setback to French yield and quality from “several months of heavy rainfall”, and trimmed its estimate for the US crop, Australia and Ukraine harvests were upgraded. The forecast for Australia’s crop was lifted by 1.0Mt to 30.0Mt, supported by “marginally improved growing conditions due to recent precipitation”, while the estimate for Ukraine’s production was hiked by 2.1Mt to 21.6Mt on a higher area figure, albeit still expected below last year’s 1.4Mt harvest. Nonetheless, while the world harvest for 2024 was upgraded by a 2.1Mt, the forecast for consumption was lifted further, by 4.1Mt, fostering the small cut to the estimate for carryout stocks. “Global consumption is raised… to a record 804.0Mt, mainly on higher feed and residual use for the EU, Kazakhstan, and Ukraine,” the USDA said. The forecast for the UK harvest was held at 10.85Mt but, with an increased import figure of 3.2Mt, the estimate for UK stocks at the end of 2024/25 was raised by 400Kt to 3.2Mt.  |
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Graintab is a trading name of CRM Commodities Ltd (CRM Agri) which delivers independent agricultural commodity market research and advisory services. [www.crmagri.co.uk]
Graintab is a trading name of CRM Commodities Ltd (CRM Agri) which delivers independent agricultural commodity market research and advisory services. [www.crmagri.co.uk]
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