The latest World Agriculture Supply and Demand Estimate (WASDE) issued by the U.S. Department of Agriculture had the following details:
Foreign 2018/19 wheat supplies are decreased 9.3 million tons primarily on lower production, which is the smallest in three years. The production declines are led by a 4.4-million-ton reduction for the EU reflecting continued dryness especially in the north. Australia, Russia, and Ukraine are lowered 2.0 million, 1.5 million, and 1.0 million tons, respectively, and also reflect continued dryness.
China production is reduced 1.0 million tons on lower harvested area as reported by the Ministry of Agriculture. Global 2018/19 exports are lowered 1.9 million tons on decreased supplies. EU exports are reduced 1.5 million tons and Australia and Russia are both lowered 1.0 million tons. These export reductions are partially offset by a 1.0-million-ton increase for Canada and a 0.7-million-ton increase for the United States. Total foreign consumption for 2018/19 is lowered 2.3 million tons on both lower food and feed and residual use. With global supplies declining more than projected use, world ending stocks are reduced 5.3 million tons to 260.9 million.
This month’s 2018/19 foreign coarse grain outlook is for lower production, trade, and stocks relative to last month. Russia corn production is lowered, reflecting reductions to both area and yield. Extreme heat and dryness in the Southern and North Caucasus districts during the month of June is expected to reduce yield prospects. Corn production is raised for the EU, but lowered for Canada. Barley production is reduced for Russia, Australia, and the EU, but raised for Canada. For 2017/18, Brazil corn production is reduced based on the latest government statistics.
Major global trade changes for 2018/19 include lower corn exports for Russia, more than offset by increased exports for the United States. Corn imports are raised for South Korea and Saudi Arabia, but lowered for Japan and Mexico. Sorghum imports are lowered for China, but partially offset by increases for Mexico and Japan. For 2017/18, corn exports are lowered for Argentina and Brazil. Foreign corn ending stocks are lowered from last month, with the largest declines for China, the EU, and Mexico
Global 2018/19 rice supplies are raised fractionally on increased production for the United States and Vietnam more than offsetting reductions in Australia, South Korea, and Russia. World exports, while still a record, are modestly lower this month as reductions for India and Australia are not completely offset by higher exports for Vietnam and Pakistan. Global ending stocks are raised by 0.6 million tons to 143.8 million, almost entirely due to a nearly 1.0 million increase for India.
The 2018/19 global soybean supply and demand forecasts include higher production and lower trade and crush compared to last month. The tariff that China recently imposed on U.S. soybeans is expected to cause higher prices for soybeans in China and slower protein meal consumption growth. Lower demand and a year-over-year drawdown in stocks for China are forecast to result in reduced crush and an 8-million-ton decline for imports to 95 million. Parallel to this change is a 6.8-million-ton decline for U.S. exports that is partly offset by a 2.1-million-ton increase for Brazil.
Planted area for Brazil for 2018/19 is expected to expand with higher prices resulting from increased trade with China, leading to a 2.5-million-ton increase in production to 120.5 million. With lower soybean crush and reduced soybean oil production, China is expected to increase imports of other vegetable oils, including soybean, palm, and rapeseed. Total global 2018/19 oilseed production is down 1.4 million tons to 592.6 million with a 4.3-million-ton increase for soybean production offset by lower rapeseed and sunflower.
Rapeseed production is reduced 2.6 million tons with lower production for the EU, Australia, Ukraine, and Russia. In the EU, rapeseed production is lowered for Germany and the UK on persistent dryness while production is lowered for France on pest pressure. Sunflowerseed production is down 2.9 million tons mainly for Russia and Ukraine on lower yields from dry conditions.
Historical revisions to China’s consumption back to 2014/15 account for most of a 3.3-million-bale decline in 2018/19 world beginning stocks. World 2018/19 consumption is 1.6 million bales higher than in June, as the revisions to China’s consumption estimates carry through into the 2018/19 projection year with a 1.0-million-bale increase. Consumption forecasts are also higher for Bangladesh, Pakistan, Brazil, and Vietnam.
World production is projected 290,000 bales lower than in June, as reduced U.S. and Australian production more than offsets increases for Brazil, India, and Mexico. World trade is projected 165,000 bales higher this month as lower U.S. exports are more than offset by increases by Brazil and China. Ending stocks are 5.2 million bales lower than in June, with the largest declines in China (4.6 million) and the United States. India’s and Brazil’s ending stocks are forecast higher.