- Post USDA we see further downward pressure and a lower close on new crop soybeans, meal and wheat with corn finishing either side of unchanged. Clearly yesterday’s crop report underlined the potential for the soy and wheat crops around the world. The market appears to be waiting confirmation, from whatever source, of record large corn yield and it may be the September report which does just that.
- Ukraine’s Agricultural Minister announced the 2014 grain harvest could reach a record 63 million mt, which would indicate a corn output of some 28.5 to 30 million mt (vs. USDA’s 27 million mt yesterday). Last year’s output was 30.9 million mt and allowed exports of around 20 million mt, and given their 1 million mt greater opening stock it is entirely possible that this season could see 20 million mt exports again (vs. USDA’s 16 million mt yesterday). Where and at what price remain the questions as the EU will likely curtail corn imports in the face of what seems to be a massive (and growing) feed wheat supply. For what it is worth, current Ukraine pricing shows feed wheat at a $10/mt discount to US Gulf and corn at a $20/mt discount, which is huge!
- Russian wheat yields are continuing to astonish to the upside and private forecasters are again increasing their estimates to between 61 and 63 million mt (vs. USDA’s 59 million mt yesterday, which was a 6 million mt hike on their July figure). With these sort of numbers in the offing we could well be some way off a “bottom” in the Black Sea market, particularly as the (local) N African market will be unable to absorb all of the excess tonnage.
- Finally, in a brief report tonight, the annual Pro Farmer crop tour kicks off next week and, along with the rest of the market, we will be looking to see what yield estimates they arrive at and how they compare with the USDA’s latest offerings.