Feb 26, 2021

IGC Raises World Wheat Forecast

Markets continue correction lower into month end

Argentina Crop Conditions

  • The Buenos Aires Grain Exchange reported corn conditions improved to 30% good to excellent from 24% last week (see Chart below).
  • So far damage to the corn crop has been limited and the exchange maintained its forecast at 46 million tonnes compared to USDA at 47.5 million.
  • BAGE reported 75% of the soy crop is forming pods versus 85% average.
  • 26% of the crop has reached pod fill compared to 50% average.
  • None of the crop is mature yet, which is behind 7% last year and 9% average.
  • Soy crop ratings declined to 15% good to excellent from 19% last week, and are below last year’s 66% (see Chart below).
  • The exchange held its soy crop forecast steady at 46 million tonnes.
  • Soil moisture conditions also declined as optimum/favorable ratings dropped to 74% versus 79% last week.
  • BAGE also noted potential for further reductions going forward, ahead of potential stressful weather.

FBN’s Take On What It Means: Recent scattered showers have helped some areas and temperatures have been below average. There is still concern for rising crop stress, especially during the next five days as temps are forecast to rise with no rain expected. However if rain forecast in the following week arrives, the portion of the grain belt suffering from serious crop stress will be reduced and that may protect some of its production potential.

FBN

IGC Raises World Wheat Forecast

  • The International Grains Council increased its global wheat crop forecast by 5 million tonnes to 773 million tonnes.
  • The increase partly reflects upward revisions for crops in Australia, Kazakhstan and Russia.
  • IGC raised its forecast for Australia's wheat crop to 33.3 million tonnes from a previous forecast of 31.2 million, in line with ABARES.
  • The agency projected Kazakhstan's crop at a 3 year high of 14.3 million tonnes, up from 12.4 million last year.
  • Russia's crop was estimated at 85.3 million tonnes, up from 84.5 million previously.
  • For the 2021/22 season, total world wheat production is forecast at a record 790 million tonnes, up from 773 million last year.

FBN’s Take On What It Means: The report brings the Council generally into alignment with other agencies and is not a great surprise. In the US fewer planted acres and recent extreme cold likely keeps support beneath the market, but the outlook for record world stocks could serve to stem upside.

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Kevin McNew

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Magazine

Marketwatch: Jan, 18

US Corn Price Idx: ZCPAUS.CM

open: 5.7667
high: 5.8486
low: 5.7266
close: 5.8288

US Soybean Price Idx: ZSPAUS.CM

open: 13.366
high: 13.376
low: 13.2328
close: 13.2696

US Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 7.3061
high: 7.3384
low: 7.2334
close: 7.2454

US Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 7.0114
high: 7.0566
low: 6.9566
close: 7.0014