| Wheat futures renewed their decline as the USDA in its monthly Wasde crop report lifted its forecast for world stocks of the grain at the close of 2024/25 by 5.0Mt. The upgrade surprised a market which had expected the inventory figure to remain little changed. Corn For corn, the USDA unexpectedly reduced, marginally, its forecast for US stocks at the close of 2024/25, to 53.3Mt. While this represented only a modest 130Kt decline from the June forecast, it was a sizeable 4.6Mt below the figure that the market had expected, according to a poll of analysts. The downgrade came too despite a bigger-than-forecast upgrade, of 6.1Mt to 383.6Mt, in the forecast for this year’s US corn harvest, as the USDA held its yield estimate at a record 11.5t/ha, rather than trimming it as traders had expected. “Although June heat and dryness stressed some Southern crops, including reproductive corn, most Midwestern crops still had time for more favourable weather to return,” the department said. The impact of the harvest upgrade was offset, however, by increases too to figures for US corn exports and domestic consumption, both for 2023/24 and next season. Exports were seen at 56.5Mt both this season, “based on current outstanding sales and shipments to date”, and next, “based on larger supplies and lower expected prices”. The forecast for average 2024/25 US farmgate corn prices was trimmed by $0.10/Bu to a five-year low of $4.30/Bu. At a global level, the forecast for corn carryout stocks next season was raised by nearly 900Kt to 311.6Kt, in line with investor expectations. The figure for inventories at the close of 2023/24 was reduced by 3.2Mt to 309.1Mt, reflecting reduced expectation for Ukraine, after a faster-than-anticipated export programme, as well as the US. Soybeans The USDA reduced its forecast for US soybean stocks at the close of next season by 500Kt to 11.9Mt, a slightly bigger downgrade than the market had pencilled in. The estimate for this year’s US harvest was trimmed by 400Kt to 120.7Mt, a slightly less significant revision than analysts had forecast, but the impact was offset by a lower-than-expected figure for carry-in stocks. The USDA made only modest additions to its estimate for the world balance sheet, although did lift expectations for Argentine and Brazilian exports in 2023/24. This even as the Argentine harvest estimate was trimmed by 500Kt to 49.5Mt. Wheat The US lifted its forecast for world wheat inventories at the end of 2024/25 by 5.0Mt to 257.2Mt – surprising a market which had expected the number to be little changed. Indeed, the figure was comfortably above even the most optimistic analyst forecast. The upgrade, which nonetheless left a drawdown of 3.7Mt on the cards, reflected in the main an upgrade to the US stocks estimate, by 2.7Mt to 23.3Mt. The US harvest was pegged at 54.7Mt, up by 3.6Mt from last month, a far bigger lift than traders had pencilled on, on increased yield and area estimates for both spring and winter crops. “Some crops-including rice and spring wheat- experienced more favourable growing conditions during June and exhibited little overall change in condition,” the USDA said. The estimate for Canada’s harvests was raised too, by 1.0Mt to 35.0Mt, “on improved moisture conditions in the Prairie Provinces”, with Argentina’s harvest upgraded by 500Kt to 19.0Mt. However, the EU harvest was trimmed by 500Kt to 130.0Mt. The estimate for the UK was left at 10.9Mt. The estimate for US farmgate wheat prices in 2024/25 was cut by $0.80/Bu to a four-year low of $5.70/Bu “on higher stocks, recent declines in futures and cash prices, and lower projected US corn prices”. |
 |
