CUTS to South American summer crops appeared in USDA’s World Agricultural Supply and Demand Estimates January report released overnight.
“Brazil’s (corn) production was lowered 1 million tonnes (Mt) which was expected but Argentina’s 3Mt cut was bigger than expected,” Lachstock Consulting said in its commentary on the report.
As the result of dry seasons for much of South America’s major cropping areas, USDA now pegs cut Brazil’s 2022-23 corn production at 125Mt, and Argentina’s at 52Mt.
The report left Australia’s 2022-23 wheat crop, now nearing the end of harvest, at 36.6Mt, and Argentina’s at 12.5Mt.
“World ending stocks estimates were considered slightly bullish for corn, slightly bearish for soybeans and neutral for wheat,”
“Corn and soybean prices rallied after the release while wheat struggled to gain much momentum after the much bigger than anticipated area planted.
US estimates released overnight by USDA have its wheat production and export figures unchanged from December, but increased domestic consumption saw US ending stocks reduced.
“Globally, USDA increased production in Ukraine and the EU, while unexpectedly leaving Russian and Australian production unchanged, leading to a small increase in global production and ending stock estimates.”
The Ukraine estimate was lifted 500,000t to 21Mt, while the EU figure added 400,000t to take it to 134.7Mt.
Lachstock said a cut to US corn production because of lower harvested area was a surprise to the market.
US soybeans were also a surprise with lower harvested area and a lower national average yield which was below the range of pre-report estimates.
“US ending stocks estimates were considered bullish for corn, soybeans and wheat.”
USDA’s estimates for China’s 2022-23 wheat and corn imports are unchanged at 9.5Mt and18Mt respectively, and Russian wheat exports at 43Mt are also steady.
Source: Lachstock Consulting