The latest crop reports from the United States Department of Agriculture brought both bullish and bearish news to the markets on Nov. 8. In its crop production report, the USDA trimmed its estimates for the U.S. soybean crop. Soybean production is forecast at a record 4.6 billion bushels, down 2 per cent from the October forecast but up four per cent from last year.
Meanwhile, trade watchers were paying close attention to the export numbers in the World Agricultural Supply and Demand Estimates report(WASDE). U.S. soybean exports are reduced by 160 million bushels to 1.9 billion with lower imports projected for China. Although sales to China are minimal, the USDA says strong sales to other markets are expected to continue, which is likely to result in a larger share of U.S. exports in the second half of the marketing year. With lower exports and slightly higher crush, soybean ending stocks are projected at 955 million bushels, up 70 million.
Global soybean production is reduced by 2 million tons with lower production for the United States and Argentina partly offset by increases for China, India, and Ukraine
U.S. corn production is forecast at 14.6 billion bushels, down 1 per cent from the October forecast but up less than 1 per cent from last year. According to WASDE, feed and residual use are lowered 50 million bushels based on a smaller crop and higher prices. Exports are reduced 25 million bushels based on expectations of increased competition from Ukraine. With supply falling more than use, corn ending stocks are down 77 million bushels from last month.
Globally, coarse grain production for 2018/19 is forecast to be 29.9 million tons higher to 1.373 billion, with a greater corn production forecast for China accounting for a large portion of the increase. Aside from China, corn production is forecast higher for Ukraine, Argentina, Kenya, Moldova, and Russia. EU corn production is lowered, mostly reflecting reductions for Hungary, Poland, and Germany.
Supplies for the 2018/19 U.S. wheat crop are unchanged this month, and total use is raised 7 million bushels on higher seed use that reflects increased projected 2019/20 wheat planted area.
On the global side, wheat supplies are raised 6.7 million tons on both increased production and beginning stocks. The USDA notes that the vast majority of this change stems from the updated production data released by China’s National Bureau of Statistics (NBS), which made significant production changes from 2007/08 through 2017/18. In addition, China’s 2018/19 production forecast is raised with both higher harvested area and yield, based on the NBS revisions.