Global wheat supplies reduced; coarse grain, oilseeds output lowered in latest USDA forecast

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The U.S. Department of Agriculture (USDA) said it was reducing global 2018/19 wheat supplies forecast, primarily on lower production forecasts for Australia and Russia.

“Australia’s production is decreased 1.5 million tons to 18.5 million on continued dry conditions and possible frost damage. This would be Australia’s smallest production since 2007/08,” it said in its latest World Agriculture Supply and Demand Estimates (WASDE) report.

It reduced Russia’s wheat production by1.0 million tons to 70.0 million on lower-than-expected yields in some spring wheat areas.

“Projected global 2018/19 trade is lower, almost all on reduced Australian exports, which are down 1.0 million tons to 13.0 million<’ the report said, adding that global imports were being decreased with Bangladesh, Azerbaijan, and Nigeria accounting for most of the reduction.

Projected 2018/19 world consumption is fractionally lower, primarily on less use in Azerbaijan, Bangladesh, Nigeria, and the United States, the USDA said, adding that it was reducing global ending stocks by1.1 million tons to 260.2 million, down 5 percent from last year’s record.

Coarse Grains

Global coarse grain production for 2018/19 is forecast down 3.8 million tons to 1,343.4 million.

The 2018/19 foreign coarse grain outlook is for lower production and consumption, and higher stocks relative to last month, the USDA said, adding that it was forecasting a modestly higher foreign corn production reflecting projected increases for Egypt, Mali, Kenya, Canada, the EU, and Serbia that were partly offset by reductions for Russia and Malawi.

“The projected corn yield for Russia is lowered based on reported harvest results to date. Corn exports are reduced for Russia, with more than offsetting increases for the United States, Serbia, and Canada. Corn imports are raised for Mexico and Israel, with the former based on lowered expected imports of sorghum,” the report said.

Foreign corn ending stocks are higher, mostly reflecting increases for Mexico, Egypt, and Iran that are partly offset by reductions for South Africa and Turkey. Global corn stocks, at 159.4 million tons, are up 2.3 million from last month, it added.

Oilseeds

Global oilseed production for 2018/19 is projected at 603.9 million tons, down 0.7 million from last month as lower peanut production is partly offset by higher soybean and rapeseed production.

The USDA said it was projecting global soybean output at a record 369.5 million tons, up 0.2 million with higher production for Canada partly offset by lower projections for India, the United States, and Mexico.

“The soybean and peanut crops for India are reduced on lower area harvested based on government reports. India’s peanut yield is also reduced due to below-normal and inconsistent rainfall in Gujarat where nearly half of the peanuts are produced,” the report emphasised.

Despite lower global oilseed production, increased beginning stocks, mainly in the United States, results in a 2.0 million-ton increase to global oilseed ending stocks to 123.8 million, it said, adding that global soybean ending stocks are increased 1.8 million tons to 110.0 million

Cotton

The USDA said it was lowering the 2018/19 global ending stocks forecast by 4 percent this month as lower production and sharply lower beginning stocks offset marginally smaller consumption.

“Stocks are lowered mainly in India, as revisions are made to production, consumption, and loss over 2002/03-2013/14 to better reflect Indian government data (consumption) and the impact of shifting producers’ marketing patterns,” the report said.

The USDA lowered production forecasts for Australia, and raised for Greece and the United States. Consumption and imports were lowered for Turkey.

“Global beginning stocks are lowered 2.9 million bales and ending stocks are lowered 3.0 million bales. Ending stocks in 2018/19 are down 6.4 million bales from last year, largely reflecting an expected 8.2-million-bale decline in China,” the report said.

Prashant has worked in the publishing industry for 17 years. His keen interest in commodities developed while working for organisations such as like Thomson Reuters, Wolters Kluwer & McGraw-Hill eventually brought him here. In his free time, Prashant consults with businesses in the digital space.

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