Nearly 13 billion bushels of corn and more than 3 billion bushels of soybeans will be produced in the US this year, according to USDA’s August Crop Report released on Wednesday. Along with the larger than earlier estimated wheat crop, those will significantly bolster the world grain supply. While US crops will have potential for export trade, will they be needed? Another report released Wednesday by the USDA gives an indication.
USDA’s World Agriculture Supply and Demand Estimates were also updated Wednesday and reconciled with the field estimates obtained by the National Agriculture Statistics Service.
Coarse grains. Globally the supply of corn and other feed grains will be 8.3 million tons higher than calculated last month, helped by US supplies and better crops in Ukraine, India, and the European Union. However, the corn crops in Mexico, Russia, South Africa, and Argentina will be smaller, and that will boost corn import and export business. USDA says Mexico and Taiwan will be buying more and the US will be exporting 3.8 million additional tons. That was also reported by USDA when it forecast corn exports would be 2.150 billion bushels, up 200 million from earlier projections. When the marketing year comes to an end in 12 months, stocks are expected to be higher, reflecting the larger corn carryout here in the US. USDA says other changes in the supply and demand of feed grains concern sorghum, barley, and oats, with production increases forecast in all. Canada has a smaller oat crop, so trade will decline and ending stocks will be lowered.
Oilseeds. Global oilseed production for the current year is forecast at a record high, despite world production being slightly lower this month than last. Chinese soybean production is expected to be slightly smaller due to lower yields from excessive moisture. On the other hand increased production in the EU and the Ukraine will offset the lower production in China. European rapeseed production will be at record high levels from better yields, and a large sunflower crop in the EU. In the US, oilseed production estimates declined slightly to 94.5 million metric tons, because of lower soybean and cottonseed production. That correlates to the 3.199 billion bushel soybean crop estimated for 2009. US soybean exports are expected to decline slightly to 1.265 billion bushels, with Argentina shipping more beans and meal to offset the US drop in oilseed trade. USDA raised its estimates of soybean and product prices in the August forecast. While soybean prices will be up 10¢ per bushel, the average price of soybean meal was raised $5 per ton, and the average price of soybean oil was raised a penny per pound.
Wheat: Global production and supplies are better than once expected, says USDA, which pushed up the world production estimate by 5 million tons, with a larger carry-in and more overall production. 2009 production grew by 2.8 million tons, with the help of larger crops in the US, EU, China, and the Ukraine. Production would have been larger, but for lower production in Russia, Argentina, Canada, and Kazakhstan. Indian production reached a record of 80.6 million metric tons. In the EU, some countries reported higher production and others reported less, with an overall gain. In both China and the Ukraine, production was raised by 1 million metric tons. The production cuts were attributed to dryness and extended July heat, as well as rain coming too late to help the Canadian wheat crop.
Global wheat exports are expected to be slightly less than prior years, but only by 600,000 tons. However, there will be significant drops in export business for Russia, India, Argentina, and Kazakhstan, and similar increases in trade for the EU and the Ukraine. Global consumption is expected to be only 2.7 million tons more, held back by reduced feeding of wheat in Europe and Canada. Ending stocks will be higher by 2.3 million tons, helped by the larger carryover from the old crop.
Summary:
Global grain and oilseed production will record numerous pluses and minuses this growing season, and as a result many countries will have to import, making opportunities for exporters, such as the US, to sell surpluses. US corn exports are expected to be 2.150 billion bushels of the new crop, and soybean exports are expected to be 1.265 billion bushels. Both are in the neighborhood of the past two years, and should help support domestic grain and soybean markets.
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