Australia Lowers 2019/20 Wheat Exports By 18%
The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) lowered its wheat export forecast for the 2019/20 season as a prolonged drought continues to cause production concerns.
ABARES predicts wheat exports would total 11.7 MMT in the crop year beginning in July, down from its previous estimate in March of 14.2 MMT.
Exports and production are lowered by 18% and 11% from March.
Estimated exports are still 50% above 2018/19’s 9 MMT.
Australia's east coast, where most of the wheat is for domestic consumption, has recorded less than 40% of typical rainfall levels over the last six months. The western wheat producing region has received cooler temperatures and has better chances of production.
Australia is one of the top 10 wheat exporters in the world. The country’s status of a global export has declined in recent years as drought has pushed production lower.
What It Means for the U.S. Farmer: At FBN we believe that ABARES lowering Australia’s new crop wheat production and export program could be beneficial for the U.S. wheat producer. While the U.S. white and soft wheat crops are suffering from a drought and rain we believe that it is possible that low protein and HRW and HRS could benefit from increased Asian feed wheat export demand.
U.S. Crop Progress Report: Supportive Corn and Soy; Bearish Spring Wheat
The USDA June 17 Crop Progress report showed 92% of the corn corp as planted, or 8% unplanted. 100% planted is the 5 year average.
The 8% equates to 7.192 million acres of corn acres unplanted.
These 7.19 million of unplanted corn acres is just ahead of the USDA’s June 28th Acres report which is the government’s followup to the March Prospective Plantings report.
Corn condition was unchanged from last week at 59% rated “Good/Excellent”
Reported planted soybeans are 77% vs the 5 year average of 93%.
13% unplanted translates to 11 million acres. Eastern corn belt states along with Missouri and S. Dakota remain behind their 5 year averages.
55% of soybeans have emerged vs. the 5 year average of 84%.
Soybean condition scores will be reported next week.
Spring wheat condition scores look good. The only state with “very poor/poor” is Montana with 4%.
Winter wheat harvest below the 5 year averages in OK, KS, IL and IN.
What It Means for the U.S. Farmer: At FBN we believe that the market will focus on the corn condition scores first and then the planting pace and emergence. Given the outstanding acres we expect the USDA to lower acres in their June 28 acres report. The soybean planting place and lack of acres planted in key states remains a concern. We believe that as the end of June approaches this can be supportive for the complex.
The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)
