With the June USDA WASDE Report out last night – Wednesday 11th June (US time), the grain markets continued the bearish sell down on the continued focus on abundant global supply with wheat production being raised by 4.6 Mt predominantly with increases out of Europe (up 1.4 Mt), Russia (up 1 Mt), India (up 1.85 Mt) & China (up 1 Mt). This now means the global wheat production – consumption is not so balanced with a supply surplus of about 2.9 Mt, which more than outweighs the reduction in the US winter wheat crop, and hence funds/managed money continue adding to their short wheat positions. This now puts the global ending stocks for wheat at 188.61 Mt with the stocks to use ratio sitting squarely on 27% compared to 26.5% last year.
Corn also didn’t fair too well with increases to global production out of Europe, Russia & Ukraine, due to favorable conditions for corn even in the US too at the moment. Global ending stocks for corn were raised to 182.65 Mt with the stocks to use ratio increasing slightly to 18.9% up from 17.8% last year.
Last but not least, soybeans finished down overnight on the back of slight increases to global ending stocks at 82.88 Mt (up 0.65 Mt) with stocks to use at 29.5% and expectations of a big production year out of the US this year to the tune of 98.93 Mt. US soybean ending stocks are therefore expected to increase from last year’s tight 3.4 Mt (3.7% stocks to use) to an expected 8.84 Mt or about 9.4% stocks to use.
Closer to home, ABARES yesterday released their update on the 14/15 Australian wheat crop with a reduction down to 24.59 Mt on the back of continued dryness and concerns about the developing El Nino situation over parts of the East Coast. Interestingly, ABARES lowered their Australian barley production estimates down by a massive 22% to 7.5 Mt due to expectations of a return to normal yields from last year.
ABARES estimate that total grain production for the 14/15 season for Australia will be about 38.8 Mt, down from 44.1mt last year.