US slashes outlook for US Corn, Wheat and Soybean and significant reductions in Russia and Canada in today’s WASDE report. US corn production will likely reach 14.750 mil bushels vs a trade guess of 15,004 and the US soybean crop production at 4,339 mil bushels vs a trade guess of 4.375 mil bushels. The US Wheat crop seen at 1,697 mil bushels vs 1,723 mil bushels in July. Brazilian corn crop at 87Mmt compared to 93Mmt in July. Argentina no change at 48.5Mmt vs 48.5Mmt. Ukraine corn crop at 24Mmt vs 30.3Mmt in July.
Substantial cuts were made to Canadian and Russian wheat numbers. Russian wheat production has been reduced by 12.5Mmt to 72.5Mmt which was a larger decrease than anticipated by the trade who expected a downgrade to circa 75Mmt – 78Mmt. This was down to decreased winter wheat production which is only slightly offset by higher spring wheat output, winter wheat reduction has been made on additional data from Rosstat regarding planted area, Russia’s statistical agency. Canada’s production is lowered 7.5Mmt to 24Mmt on worsening drought conditions across the Prairie provinces during July. This would be the smallest Canadian wheat crop since 2010/11. Partially offsetting these are increases in Ukraine and Australia. Ukraine has increased anticipated wheat crop by 3.3Mmt to 33Mmt and Australia has been increased by 1.5Mmt to 30Mmt.
With larger than anticipated reductions, US markets rallied with Chicago wheat SEP-21 trading up $0.32/bushel and US corn SEP-21 trading up $0.26/bushel after the report was released. Bullish US markets supported European markets with London wheat Nov-21 reaching highs of £196.25/t before reaching last trading price of £194.95/t, and settling at £194.85/t up 5.40 on the day. Matif also rallied with last traded price for Sep-21 at €246.00/t, up €9.50/t on yesterday’s settlement price. Black sea wheat futures also rallied to last trading price for Aug-21 at $282/t, up by $11.75/t on yesterday’s settlement price.
Grain group Soufflet said today (Reuters) that much of the soft wheat and durum wheat crops being harvested in France were showing weak quality after rain-affected harvest. From soft wheat, the main setback was test weights with only 35% of crop collected by Soufflet reaching the milling standard of 76kg/hectolitre according to Francois Berson, Soufflet’s head of procurement. Spring barley remained satisfactory.