A still tight US soybean market but less so

The latest estimates​​ from the US Department of Agriculture (USDA) were released yesterday.

The publication saw long-overdue cuts to Brazilian corn production estimates for the 2020/21 season. They were revised down to 98.5Mt, from 102Mt in May. Although, now lower, there are potentially further cuts to come, said Peter Collier, senior market advisor, CRM Agri​​.  

Changes to US corn production were minimal, but the 2020/21 season end-season stocks were trimmed again, down from 31.93Mt to 28.12Mt, and 2021/22 end-season stocks lowered from 38.28Mt to a tighter 34.47Mt.

“With US stocks trimmed further, this places and even greater importance upon the ‘21 harvest. The US cannot afford to have a below average yielding corn crop in order to balance demand next season,”​ Collier noted.

Wheat​

While, on paper, corn markets tightened, wheat recorded the opposite. The largest surprise being Russian production estimates, revised upwards to 86Mt, up from an already high 85Mt, said the analyst.

Confidence in EU wheat production is increasing, with production estimates increased from 134Mt to 137Mt in 2021/22. Upward revisions were also recorded for US wheat, estimated at 51.66MT, up from a previous 50.95Mt.

“The growing confidence in wheat, be it in Europe, Ukraine or Russia is more than counteracting the potential cuts to US spring wheat; 2021/22 is looking better supplied, but it is corn that will continue to dictate the overall grain market direction,” ​Collier told us.

Soybeans​

Although production estimates were little changed, of note were larger than previously estimated US soybean stocks.