Boosting of Soybean & Corn Stocks by WASDE to Pressurize Prices
The latest WASDE (World Agriculture Supply Demand Estimate) Monthly report released on 10th August showcases that U.S. is likely to face lower supplies, greater use, and reduced stocks in the Wheat crop. Wheat production is lowered by 4 million bushels(1 bushel=27.22kgs) to 1,877 million bushels on a slight reduction in winter wheat and durum production as indicated by the NASS August Crop Production report. Projected food use is increased by 5 million bushels to 970 million based on the latest NASS Flour Milling Products report. This would be a record food use, surpassing 2017-18, which was also revised higher. Projected wheat exports are also raised by 50 million bushels to 1,025 million on substantially lower exportable supplies for the European Union and limited additional export capacity of several other major competitors. Projected 2018-19 ending stocks are reduced to 50 million bushels to 935 million, down 15% from last year.
Elsewhere, Soybean production is forecast at 4,586 million bushels, up by 276 million bushels on higher yields. Harvested area is forecast at 88.9 million acres, unchanged from the July projection. The first survey-based soybean yield forecast of 51.6 bushels per acre is 3.1 bushels above last month and 2.5 bushels above last year. As higher production more than offsets lower beginning stocks, soybean supplies for 2018-19 are projected at a record of 5,040 million bushels, 5 percent above last month. With larger supplies, crush and exports are raised 15 and 20 million bushels, respectively. Ending stocks are projected at 785 million bushels, up by 205 million bushels from the last month. Global oilseed 2018-19 supply and demand forecasts include higher production, exports, crush, and stocks compared to last month.
Global oilseed production for 2018-19 is projected at 603.1 million tons, up by 10.5 million bushels with higher soybean, sunflower seed, cottonseed, and peanut production partly offset by lower rapeseed. Global soybean, peanut, and cottonseed crops are raised on higher U.S. production.
Global oilseed exports for 2018-19 are projected at 182.5 million tonnes, up by 1.2 million tonnes with higher soybean exports for the United States and higher rapeseed exports for Ukraine. Global crush is raised 1.2 million tonnes to 501.8 million. Lower soybean crush for China and rapeseed crush for the EU are offset by higher rapeseed crush for Russia and sunflower seed crush for the EU, Russia, and Ukraine. With larger increases to supply than use, global oilseed stocks are raised 8.3 million tonnes to 119.9 million tonnes.
This month’s 2018-19 U.S. cotton forecast includes higher beginning stocks, production, exports, and ending stocks relative to the last month. Production for the 2018 crop is raised by 4% to 19.2 million bales (1 bale=170 kgs), on this season’s first survey-based production forecast. NASS’s survey indicates higher abandonment, but a higher average yield compared to last month’s expectations. Beginning stocks are raised by 400,000 bales due to lower-than-expected 2017-18 exports and domestic consumption, and 2018-19 exports are 500,000 bales higher, at 15.5 million bales. Ending stocks are 600,000 bales higher this month.
Projected world’s 2018-19 ending stocks are down 1 percent this month, due to a combination of lower beginning stocks and higher consumption offsetting higher production. Beginning stocks are reduced 450,000 bales, reflecting both lower production and higher consumption estimates for 2017/18. Production in 2018-19 is increased 400,000 bales, with higher expected crops in the United States, Argentina, and Turkey offsetting reduced crops in Uzbekistan, Australia, and Turkmenistan. Consumption is raised 660,000 bales, led by a 300,000-bale increase for Pakistan, with smaller increases in Indonesia, Turkey, and other countries.
This month’s 2018-19 U.S. corn outlook is for larger supplies, greater feed and residual use, increased exports, and larger ending stocks. Corn production is forecasted at 14.6 billion bushels, up by 356 million bushels from the July projection. The season’s first survey-based corn yield forecast, at a record 178.4 bushels per acre, is 4.4 bushels, higher than last month’s trend-based projection. Feed and residual use is up based mostly on a larger crop and lower expected prices. Exports are raised reflecting U.S. export competitiveness and expectations of reduced competition from Brazil. With supply rising faster than use, ending stocks are raised 132 million bushels to 1.7 billion bushels.
Outlook:- For the coming month, higher production expectancy of Soybean for the current year(2018-19) is likely to bring a surge in the ending stocks. This is forecasted to pressurize Soybean futures in the global markets. Similarly, higher supplies of Corn(Maize) is estimated to bring an incline in the ending stocks for the above commodity as well, which is projected to bring bearish trend in the United States and the Global Maize Futures. Furthermore, lower exports of Cotton from the United States has led to revision of the ending stocks for this month compared to the previous month, which is estimated to plunge Cotton Prices in the global markets. Conversely, lower supplies and higher usage for wheat in the United States is estimated to bring a decline in ending stocks. This is forecasted to support Global Wheat futures.
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