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Jul 06, 2021

Less Threatening Forecast Expected to Pressure Markets

China USDA Ag Attaché Report

  • The attaché forecast China corn imports for 2021/22 at 20 million tonnes, down from the current marketing year projection of 28 million.

  • The June USDA report forecast imports at 26 million tonnes for both the current and following marketing years.

  • The report cited high prices, larger domestic production, and a moderation in the need for imports to build stocks for the reduction.

  • The attaché forecast this year’s corn crop at 272 million tonnes versus 261 million last year, and above USDA’s current official estimate of 268 million.

  • The current season bean import projection was unchanged at 100 million tonnes.

  • 2021/22 bean imports were projected at 102 million tonnes, down 1 million from USDA’s current official estimate.

  • Modest growth in soybean meal demand was the reason cited for the reduction.

  • China’s domestic bean production estimate was also lowered by 1 million tonnes to 17.5 million.

  • FBN’s Take On What It Means For The Farmer: The agricultural attaché sees new crop feed usage in line with USDA, and up solidly from this year with the restocking of hog herds contributing to demand, though some corn feed demand was displaced with alternative products. Considering world bean shipments to China in May and June were down nearly 4.5 million tonnes, the current 2020/21 import projection of 100 million tonnes could be revised lower.


Ukraine Grain Crop Update

  • Ukraine's 2021 grain harvest could reach a record high above 75 million tonnes thanks to weather that has been beneficial for growing conditions.

  • The state weather forecaster projected the harvest will be 75.8 million tonnes of grain this year, up from 65 million in 2020.

  • The agriculture ministry has forecast that, together with oilseeds, the harvest could be approximately 100 million tonnes.

  • The harvest could include 37.1 million tonnes of corn, 28.5 million tonnes of wheat and 8.3 million tonnes of barley.

  • The USDA’s Ukraine office projected 2021 Ukrainian wheat output of 29.5 million tonnes and exports totalling 20.5 million tonnes in the 2021/22.

  • The office expects 2021 corn production of 37.3 million tonnes with exports of 30.5 million tonnes, possibly higher depending on market conditions.

  • Last year Ukraine harvested 24.9 million tonnes of wheat and 30.3 million tonnes of corn.

  • The country had exported 16.4 million tonnes of wheat and 22.6 million tonnes of corn as of June 25.

  • FBN’s Take On What It Means For The Farmer: Ukraine has already started the 2021 harvest and the weather forecast continues to be conducive to good yields, which will likely pick up some of the slack in world production. However, these projections are mostly in line with current official USDA forecasts and are already taken into account in the world supply demand estimates. Weather in North America during July and August will obviously play a larger role in future price direction.

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Kevin McNew

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Marketwatch: Dec, 03

cmdty National Corn Price Idx: ZCPAUS.CM

open: 5.6309
high: 5.6797
low: 5.6159
close: 5.6309

cmdty National Soybean Price Idx: ZSPAUS.CM

open: 11.9852
high: 12.1581
low: 11.9477
close: 12.111

cmdty National Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 8.119
high: 8.2535
low: 8.054
close: 8.2002

cmdty National Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 7.5939
high: 7.7096
low: 7.5239
close: 7.6525