The US Department of Agriculture (USDA) has sharply revised its outlook for global harvests in its monthly production report. For Europe, the USDA expects an even smaller wheat crop, while wheat production in Russia, the US, and Ukraine is increasing.
In August, the USDA anticipates significant changes in corn and soybeans within the US itself. These new figures are very unpredictable due to the approaching hurricane season. This could cause considerable damage and disappointing yields in the agricultural Midwest. These risks are not yet accounted for in the August report, leaving much room for speculation.
Although the markets are facing strong upward revisions in corn, soybean, and wheat harvests, futures exchanges respond quite cautiously immediately after the USDA figures are published. It appears many of the new assessments were already expected by analysts and thus factored in to a certain extent.
While the EU wheat harvest further declines, the USDA increased the harvest in Russia by 1.5 million tons, in Ukraine by 0.5 million tons, and in the US by 1.0 million tons. The USDA lowers global wheat production for 2020/21 by 3.7 million tons, due to a reduction of 4.0 million tons for the EU and 1.0 million tons each for Kazakhstan and Turkey. These changes are partly offset by increases of 1.5 million tons in Russia and increases of 0.5 million tons in Ukraine and 1.0 million tons in the US.
Global soybean production grows by as much as 5 million tons to 320 million tons. The global trade in soybeans is therefore expected to increase by 3.9 million tons, with exports from Brazil, Argentina, and the US also rising. This occurs alongside higher imports by China, Thailand, Egypt, and India. Due to higher global soybean consumption, mainly in China, global ending stocks are expected to rise only slightly by 0.3 million tons to 95.4 million tons, according to the USDA.
Outlooks for the global corn market now foresee higher production, increased trade, and rising stocks. However, corn production in the EU has been reduced by 0.5 million tons to 67.8 million tons, mainly due to declines in Romania and France, which are somewhat offset by increases in Poland, Italy, and Hungary.
Corn production in Ukraine is expected to be higher than previously forecast at 39.5 million tons, mainly due to a larger planted area. In the EU, Kazakhstan, Argentina, and Ukraine, the forecast for barley production has also been lowered.