Markets

Corn tightens, wheat numbers mostly steady in April WASDE

Grain Central, April 12, 2021

Russian ports including Azov have been big exporters of wheat, despite the recently introduced Russian export tax. Photo: Louis Dreyfus Company

NUMBERS in the USDA’s World Agricultural Supply and Demand Estimates (WASDE) April report are being seen as mildly supportive of global coarse grains, neutral for wheat and bearish for oilseeds.

Major drivers in the report are the increased production estimate for Brazil’s soybean crop, up 2 million tonnes (Mt) to 136Mt, and a further 5Mt lift in China’s feed-wheat-and-residual use to a record 40Mt.

In its commentary, Lachstock Consulting said the April WASDE was finally starting to show the pinch on US corn ending stocks, despite no further increases in China’s import number.

“The report is supportive to corn…, pretty neutral for wheat and neutral to bearish for beans with the Brazilian production weighing on things.”

Minor adjustments for wheat

The 2020-21 global wheat outlook is for slightly smaller supplies, increased consumption, higher exports, and reduced stocks this month.

The estimate for global wheat supplies has been cut by 500,000t to 1076.5Mt, but 2020-21 production, at 776.5Mt, remains a record.

Global wheat ending stocks are now seen at 295.5Mt, down 5.7Mt from last month.

A 430,000t increase for Argentina’s wheat crop to 17.6Mt was the biggest single production change for global wheat in the April report.

The estimate for world 2020-21 wheat consumption has been lifted 5.1Mt to 781Mt, mainly on higher feed-and-residual use for China.

Auction sales of China’s old-crop wheat stocks continue to be large, and domestic corn prices in China remain at a premium to wheat.

This is expected to further increase China’s 2020-21 wheat feed-and-residual use, raised 5Mt to a record 40Mt.

The forecast for 2020-21 global wheat trade is up 1.2Mt to a record 198.9Mt, mostly on increased exports from Russia, Europe and the United Kingdom.

Despite the recent imposition of an export tax, the forecast for Russia’s 2020-21 wheat exports is up 500,000t to 39.5Mt.

Russia’s monthly exports continue to be large and its prices remain competitive internationally.

The EU’s 27 members plus the UK are expected to export 27.5Mt of wheat, up 500,000t from the March figure.

Wheat ending stocks shrink

Projected 2020-21 world wheat ending stocks have been cut 5.7Mt to 295.5Mt, with China accounting for most of the reduction.

Stocks in China in 2020-21 are projected to decline for the first time since 2012-13.

This month’s supply and demand outlook for 2020-21 US wheat is for lower supplies, reduced domestic use, unchanged exports, and higher ending stocks.

US domestic consumption is reduced primarily on less implied feed-and-residual use as well as a small reduction in seed use, and the forecast for US exports is unchanged from last month at 26.8Mt.

Projected 2020-21 US ending stocks have been raised, but are still 17 per cent below last year.

Corn tightens

This month’s 2020-21 US corn outlook is for greater feed-and-residual use, increased corn used for ethanol production, larger exports and lower ending stocks.

US corn exports have been increased, based on export inspection data for the month of March that was the largest monthly total on record, surpassing the previous high set in November 1989.

USDA’s estimate for global coarse grain production in 2020-21 is up 1.2Mt from the March figure to 1446Mt, with the non-US figure incorporating higher production, reduced trade, and larger stocks.

Estimates for corn production have been raised for Pakistan, Europe and Ecuador, partly offset by reductions for Argentina and Indonesia. China’s estimated corn imports are steady at 24Mt.

Barley production has been raised for Argentina and Europe, but lowered for Mexico.

Major global trade changes include lower forecast corn exports for Ukraine, based on shipment data to date, while corn imports have been raised for Bangladesh.

Estimates for barley exports have been raised for Canada, Argentina, and Europe, partly offsetting reductions for Iraq and Kazakhstan.

Barley imports are sharply higher for China, partly offsetting reduction in sales to Morocco.

Foreign corn ending stocks are essentially unchanged from last month, mostly reflecting increases for South Korea and Pakistan that are offset by a reduction for Saudi Arabia.

 

 

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