The U.S. Department of Agriculture's latest "Grain: World Markets and Trade" report, released in December 2024, highlights significant shifts in global corn and wheat markets. The report indicates changes in production forecasts, trade patterns, and price trends that are likely to impact farmers, traders, and consumers worldwide.
Wheat outlook
Global wheat production has been adjusted downward, primarily due to cuts in the European Union and Brazil. Despite this reduction, overall production remains at record levels. The report notes a decrease in global consumption, driven by lower feed and residual use in Ukraine. Notably, global wheat stocks have increased, led by Russia, but remain below last year's levels.
The wheat trade landscape is evolving, with lower import forecasts for China and Saudi Arabia. On the export front, Russia and the European Union are expected to ship less, while the United States and Ukraine are projected to increase their exports. U.S. wheat prices have seen a decline across all classes, with Hard Red Spring wheat experiencing the most significant drop of $19 per ton to $277, facing stiff competition from Canada.
Corn developments
The global corn production forecast has been revised downward. Decreases in the European Union, Indonesia, and Mexico outweigh an increase in Ukraine's production. However, global corn trade is expected to rise marginally, with Canada and the United States seeing increased exports, offsetting lower shipments from Brazil and the European Union.
U.S. corn export bids have decreased by $5 per ton to $205, reflecting greater availability of new crop supplies. This price movement aligns with the general easing of export bids from all major origins, including Argentina, Brazil, and Ukraine.
Market dynamics
The report highlights interesting regional dynamics, particularly in Southeast Asia for wheat and Indonesia for corn. Southeast Asian wheat imports are forecast to remain strong in the 2024/25 trade year, despite a slight decline from the previous year's record. Australia is expected to regain some market share in the region following a rebound in production.
Indonesia's corn market presents a unique case study. After reaching their highest import levels since 2014/15 in the 2023/24 season, imports are forecast to decline by nearly 38% in 2024/25 to 1.1 million tons. This decrease is attributed to higher domestic production, which is expected to satisfy growth in domestic feed consumption.
The USDA maintains its U.S. season-average farm price forecasts at $5.60 per bushel for wheat and $4.10 per bushel for corn, indicating stability in pricing expectations despite the market shifts.
