Heavy rains in France and frosts in Russia, followed by hot and dry weather, lowered French and Russian wheat yields and helped bring down wheat production estimates in the June 12 World Agricultural Supply and Demand Estimates.
Global wheat supplies were projected to decrease 5.7 million tons to 1,050.3 million, as reductions in production for Russia, Ukraine, and the European Union were partly offset by larger global beginning stocks. The same hot and dry weather affected Ukraine wheat yields, which were lowered by 1.5 million tons to 19.5 million tons, based on similar conditions.
Because most WASDE estimates were little changed, traders focused their attention on the weather, geopolitics and the strong U.S. dollar, said Guy Allen, senior agricultural economist and specialist in Grain Marketing and Risk Management at Kansas State University. “The strong dollar is really weighing on all U.S. ag exports,” he said.
Grain traders had been expecting lower estimates for Brazil’s soybean crops, but the USDA concluded that since the harvest in Rio Grande do Sul was 66% complete and it provides only 14% of the total soybean crop, its flood issues were not enough to lower the estimates.
Global wheat consumption decreased as well, lowered by 4.3 million tons to 798 million, mainly on lower feed and residual use in the EU, Russia, and Ukraine. As global supplies tighten and prices increase, wheat for feed use is becoming less competitive in some countries. World trade was lowered as well, down 3.2 million tons to 212.8 million, as lower exports from Russia and Ukraine were only partly offset by increases for the EU and the United States.
Corn outlook unchanged
The 2024-25 U.S. corn outlook remained unchanged relative to last month. The season average price received by producers remained at $4.40 per bushel. The U.S. Department of Agriculture will release its acreage report on June 28, which will provide survey-based indications of planted and harvested area.
The global coarse grain production forecast for 2024-25 was lowered by 1.4 million tons to 1.511 billion tons. The foreign outlook was for lower production, slightly higher trade and smaller ending stocks relative to last month. Foreign corn production was slightly higher, with increases for Ukraine and Zambia offset by a reduction for Russia.
Corn area was raised for Ukraine but lowered for Russia. Zambia was higher, reflecting increases to both area and yield. Major global trade changes for 2024-25 included larger corn exports for Ukraine and Tanzania. Corn imports were raised for Malawi, Zambia and Mozambique, while corn exports were raised for South Africa, Russia, the EU, and Uruguay.
Reduced crush for soybeans
The 2024-25 outlook for U.S. soybeans includes higher beginning and ending stocks. Higher beginning stocks reflected reduced crush for 2023 -24, down by 10 million bushels on lower soybean meal domestic use that was partly offset by higher exports.
Domestic soybean oil use was lowered for 2023-24 and partly offset by higher exports. With increased supplies for 2024-25 and no use changes, soybean ending stocks were projected at 455 million bushels, up by 10 million. The forecast soybean price of $11.20 per bushel was unchanged from last month, as were soybean meal and oil prices, at $330 per short ton and 42 cents per pound, respectively.
The 2024-25 global soybean outlook included higher beginning stocks for the U.S., offset by lower stocks for Brazil and Paraguay. Brazil’s stocks were lowered on a downward revision to 2023-24 production, down by 1 million to 153 million, reflecting further in-country assessments of flooding in Rio Grande do Sul by Brazil’s state agency, Emater. Global soybean ending stocks were lowered by 0.6 million tons to 127.9 million.
Global oilseed production for 2024-25 was lowered by 1.3 million tons to 685.8 million, mainly on lower canola production for Australia and the European Union. Canola production was lowered for Australia on lower harvested area while production in the EU is lowered on a reduced yield for France.
David Murray can be reached at [email protected].
