28 February 2015 | Online since 2003

FAO raises outlook on global wheat crop


Beans closed a holiday-shortened session lower. Weekly export sales came in at 40,600 MT of old crop and 431,200 MT for new crop. Trade expectations were 0-150,000 MT of old crop and 300,000-500,000 MT of new crop, so there were no shocks there.

The usual suspects of unknown destinations (206,000 MT) and China (168,000 MT) were the featured buyers on the new crop. Informa Economics pegged US 2014 soybean production at 3.7 billion bu, up from 3.6 billion previously, sticking by their yield estimate of 44.5 bu/acre. "Adopting Informa’s production estimate with its prior demand outlook and coupling with USDA carryin of 125 million, 14/15 ending stocks are seen rising to 405 million," said Benson Quinn Commodities. That's substantially higher that the USDA’s June estimate of 325 million.

The USDA will update us with their July S&D numbers on Jul 11, factoring in Monday's new record acreage estimate. MDA CropCast increased their forecast for the US 2014 soybean crop by 3.8 MMT from last week to 100.79 MMT a 14 MMT, or 16%, rise on last year's output. The FAO left their forecast for the world 2014/15 soybean crop unchanged on a month ago at 283 MMT, up 16 MMT on this year. The see 2014/15 ending stocks up 3 MMT versus this season at 31 MMT, which is also unchanged from their June forecast. In Argentina, there's a Rosario port workers strike lined up for tomorrow. South Korea's NOFI passed on a tender for 55,000 MT of South American meal for Nov shipment saying that prices were too high. South Korea's KFA were said to have bought 60,000 MT of US, South American or Chinese meal for Dec shipment. Jul 14 Soybeans closed at $13.87 3/4, down 4 3/4 cents; Nov 14 Soybeans closed at $11.33 1/2, down 8 cents; Jul 14 Soybean Meal closed at $447.00, down $5.30; Jul 14 Soybean Oil closed at 38.56, up 9 points. For the 4-day week that puts front month beans down 44 1/4 cents, with meal down $22.80 and oil shedding 142 points.


The corn market closed a couple of cents lower heading into the long weekend. The Chicago markets won't be open again until Monday afternoon UK time. There's no Globex market tomorrow or Monday morning. Weekly export sales came in at 290,700 MT on the old crop and 474,700 MT on the new. That was in line with trade estimates for sales of 500-800,000 MT for both crop years combined.

Once again there were sizeable cancellations from unknown destinations (182,500 MT) - China? Under the daily reporting system the USDA announced 176,000 MT of new crop US corn sold to Egypt. Informa estimated the US 2014 corn crop at 13.731 billion bu, using a harvested acreage number of 83.24 million acres, and a yield figure of 165 bu/acre. Their previous estimate was for a crop of 13.766 billion bu, with yields at 163 bu/acre. MDA CropCast also marginally trimmed their forecast for this year's US corn crop, down 0.3 MMT to 354.2 MMT, although that's still a near 2% increase on last year's 347.7 MMT. The FAO raised their forecast for the world 2014/15 corn crop by 13 MMT from last month to 1001 MMT. That's now fully 20 MMT higher than the USDA's current forecast.

They also increased their estimate for carryout next season by a rather hefty 31 MMT, taking ending stocks to 200 MMT - 27 MMT more than this year and over 17 MMT above where the USDA stand. The 2014/15 production increase came mostly on the back of improved outlook for crops in the EU and the US, they said. "Utilization in 2014/15 (is) lower than was expected earlier, primarily on reduced industrial use in China. Ending stocks are raised compared to the previous month, driven by expectation of much higher carryovers in China and the US," they added. Jul 14 Corn closed at $4.17, down 1 1/2 cents; Sep 14 Corn closed at $4.09 1/2, down 2 3/4 cents. For the holiday-shortened week that puts Jul 14 corn 26 cents lower.


The wheat market was mostly higher in pre-long weekend book-squaring and consolidation. Weekly export sales of 567,500 MT beat trade expectations of 300-450,000 MT thanks to Brazil taking 140,500 MT. They have been widely reported to have featured as a big wheat buyer of late since the government temporarily removed the 10% import duty. Informa estimated the US all winter wheat crop a bit below the USDA's 1.381 billion bu at 1.369 billion, and down from their previous forecast of 1.396 billion.

The FAO raised their outlook on the global wheat crop in 2014/15 by 4 MMT from last month to 707 MMT. That increase came "mostly on improved prospects in Brazil, the EU, India and Russia, more than offsetting downward adjustments in Pakistan, Ukraine and the US," they said. They cut 2014/15 ending stocks however by 2 MMT to 180 MMT, although that's still 6 MMT up on 2013/14. "In Canada, overall conditions of seeded crops remain generally favourable, however concerns increased in the Prairie region due to stormy, wet, and unseasonably cool weather," they noted.

MDA CropCast increased their US all wheat production estimate by 1 MMT from last week to 56.5 MMT, although that's still down 3.7% on last year's output. The UkraineAgriBusinessClub forecast the grain harvest there around 12% lower than last year's record at 55-56 MMT. They see exports 19-22% lower at 26-27 MMT. The Ukraine wheat crop was estimated at 21.2-22.2 MMT versus only 20 MMT from the USDA. They see barley production at 6.8-7.3 MMT, which is in line with the USDA's 7 MMT forecast. Jul 14 CBOT Wheat closed at $5.68, up 6 1/4 cents,; Jul 14 KCBT Wheat closed at $6.97, up 14 cents; Jul 14 MGEX Wheat closed at $6.51 1/4, down 1/2 cent. For the short week that sees Chicago wheat down 17 1/4 cents, with Kansas down 29 cents and Minneapolis falling 31 3/4 cents.



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