Wheat demand, exports slowing; corn, soy estimates see little change

Global and domestic demand for wheat slowed slightly as both supplies and prices increased, according to the latest World Agricultural Supply and Demand Estimates of the U.S. Department of Agriculture released Dec. 9.

The outlook for 2021-22 United States wheat in December was for slightly lower supplies, unchanged domestic use, reduced exports, and higher ending stocks. Supplies are lowered on decreased imports with a weaker-than-expected pace for hard red spring wheat.

Export estimates were lowered by 20 million bushels to 840 million total on slowing export sales and shipments with equivalent reductions for Hard Red Winter and Hard Red Spring wheat. U.S. export prices are expected to remain “elevated” for the rest of 2021-22, according to the WASDE, further diminishing U.S. competitiveness.

Projected 2021-22 wheat ending stocks were raised 15 million bushels to 598 million but were still 29% lower than last year. The projected season-average farm price was raised $0.15 per bushel to $7.05 on NASS prices reported to date and expectations for cash and futures prices for the remainder of 2021-22. This would be the highest SAFP since 2012-13.

The global wheat outlook for 2021-22 is for higher supplies, greater consumption, increased trade, and higher ending stocks. Global supplies were projected rising by 4.3 million tons to 1,067.5 million tons total, primarily due to increased beginning stocks for Australia and the European Union and upward production revisions for Australia, Russia and Canada. Australia’s production was raised 2.5 million tons to a record 34 million, based mainly on the latest Australian Bureau of Agricultural and Resource Economics and Sciences forecast.

Russia’s production estimate was increased 1 million tons to 75.5 million, all for winter wheat on updated Ministry of Agriculture data. Canada’s production is raised 0.7 million tons to 21.7 million on the latest Statistics Canada forecast. Despite the increases for Russia and Canada, their respective production levels remain significantly below last year, the USDA said.

Corn, soy outlooks unchanged

The outlooks for both corn and soybeans remained largely unchanged from the November WASDE. Global coarse grain production for 2021-22 is forecast 2.7 million tons higher to 1,501.7 million tons. The foreign coarse grain outlook is for greater production, increased trade, and larger ending stocks relative to last month.

Foreign corn production is forecast higher as increases for the EU and Ukraine more than offset a reduction for China. Production from the EU was raised, reflecting increases for France, Romania, and Poland. Ukraine corn production is higher based on harvest results to date. Chinese corn production was reduced, reflecting the latest information published by the National Bureau of Statistics which indicated a reduction in yield that more than offset a higher planted area.

For 2020-21, corn exports for Brazil were raised for the local marketing year beginning March 2021, based on higher-than expected shipments through the month of November. Corn exports were raised for Ukraine and the EU. Foreign corn ending stocks were raised, mostly reflecting increases for Ukraine, the EU, Mexico, and Iran that were partly offset by a reduction for China.

U.S. oilseeds up

Total U.S. oilseed production for 2021-22 is forecast at 130.3 million tons, up slightly due to an increase for cottonseed. Soybean supply and use projections for 2021-22 remained unchanged from last month. Although soybean crush was unchanged, soybean oil production was raised on a higher extraction rate.

With increased soybean oil supplies, food, feed, and other industrial use of soybean oil was raised, offsetting lower consumption of canola and cottonseed oils. Based on a review of the Environmental Protection Agency’s proposed rule for 2020-2022 renewable fuel obligation targets, soybean oil used for biofuel for 2021-22 remained unchanged at 11 billion pounds.

The U.S. season-average soybean and soybean oil price forecasts for 2021-22 are unchanged at $12.10 per bushel and $0.65 per pound, respectively. The soybean meal price forecast was increased $5 to $330 per short ton.

David Murray can be reached at [email protected].