Global Wheat Conditions Mixed
The Buenos Aires Grain Exchange reported 59% of wheat fields have favorable or optimum moisture levels versus 48% the previous week.
The exchange’s Argentina wheat crop projection was unchanged at 19.1 million tonnes, up from 17.6 million a year ago.
The Rosario Grain Exchange last forecast the wheat crop at 20.1 million tonnes, and USDA projected 20.5 million in August.
ABARES increased its 2021 Australian wheat production forecast by 17% to 32.6 million tonnes, just behind the record set last year at 33.3 million.
France’s Agriculture Ministry reported that 61% of its soft wheat crop did not meet minimum test weight standards for milling quality wheat.
Saskatchewan weekly harvest was 36% complete for spring wheat, while Alberta wheat harvest was 30% complete versus the average at 9%.
Recent rain in the Canadian Prairies have downgraded some crops still in the field, and yields are far below average.
FBN’s Take On What It Means: Southern Hemisphere weather is generally favorable after recent rainfall in Argentina and eastern Australia. However, challenges remain in the Northern Hemisphere. USDA won’t update US wheat production stats in its crop report this week, but may show a somewhat tighter world wheat balance on smaller Canada, EU, and Russian wheat crops. We would expect prices to remain supported as tight stocks among major exporters are sorted out.
Firms Update Grain Yield Estimates Ahead of September WASDE
Commodity brokerage StoneX raised its estimate of US corn yield to 177.5 bushels per acre from its August estimate of 176.9; the firm raised its total corn production estimate to 14.998 billion bushels from 14.945 billion.
StoneX also raised its estimate of US soybean yield to 50.8 bushels from 50; the total production forecast was raised to 4.409 billion bushels from 4.332 billion previously.
Analytics firm IHS Markit Agribusiness lowered its corn estimate to 175.4 bushels per acre from 176.5 in August; however, they raised total production to 15.091 billion bushels from 14.911 billion.
IHS lowered its soybean yield estimate to 50 bushels per acre from 51.5 and lowered total production to 4.358 billion bushels from 4.464 billion.
FBN’s yield estimates currently stand at 172.1 bushels for corn and 50.5 for soybeans; the soybean estimate will be updated this week before the WASDE report.
In August’s WASDE, the USDA estimated 174.6 bushels per acre for corn and 50.0 for soybeans; the next report will be out on September 10.
FBN’s Take On What It Means: The USDA report this week will include planted and harvested acreage estimates, a month earlier than normal. Production estimate changes could possibly come from yield or acreage changes. FBN’s current ending stock estimates stand at about one billion bushels for corn and 200 million for soybeans, relatively tight from historical standards; this should help maintain price support for both grains in the coming months.
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