The IGC expects world wheat production to hit 798.8 million tonnes in 2024/25, which compares with 789.5 million tonnes in the current marketing year. Of that total, the IGC forecasts Canadian wheat production at 38.3 million tonnes, which compares with the IGC’s call for 2023/24 Canadian wheat production of 36.1 million tonnes.

World wheat ending stocks are forecast to tighten to 262.2 million tonnes, from an expected 267.5 million tonnes in 2023/24.

World corn production is forecast at 1.233 billion tonnes, which compares with 1.227 billion expected in 2023/24. The IGC lowered its corn production estimate for the current marketing year by seven million tonnes from the February forecast due to declining prospects out of South America. The IGC forecast world corn ending stocks to rise to 296.9 million tonnes by the end of the 2024/25 marketing year, from 293.9 million tonnes in 2023/24.

The IGC forecast world soybean production in 2024/25 at 412.8 million tonnes, which compares with 390.5 million tonnes for the current crop year. World soybean ending stocks are forecast to rise to 172.1 million tonnes in 2024/25, which compares with an anticipated 165.9 million tonnes for the current crop year.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg. 

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USDA on Tuesday issued its monthly WASDE report, in which estimated U.S. corn production was lowered by nine per cent, along with an eight per cent reduction in area planted.

“The June (WASDE) report, you typically get cuts for corn. The July report, you get those cuts for soybeans,” said Steve Georgy of Allendale Inc. in McHenry, Ill.

USDA indicated in its June report that adjustments will be made for soybeans in the July report. With wet conditions persisting throughout the U.S. Midwest and Plains, farmers were switching from corn to planting soybeans. However, that constant wetness has slowed planting of all crops by a great deal.

“Sixty per cent planted for soybeans and still have 40 to go, with a lot of rain in the forecast in the next couple of weeks,” Georgy added, noting soon it could be too late to plant soybeans.

Even for corn, he expects a further adjustment in a future WASDE report because of the wet conditions that seemingly won’t go away.

One important revision USDA made in its latest report was dropping corn ending stocks by 32.6 per cent, to 42.56 million tonnes. Georgy noted that’s due in part to lower yields expected this year.

Wheat was “neutral” in the report, with only small changes, he said. “Wheat is going to be a follower right now versus a leader.”

The most important thing for wheat right now is trying to get demand to pick up, he said.

— Glen Hallick writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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Ending stocks of both crops are expected to remain large.

U.S. soybean production for 2019-20 was forecast at 4.15 billion bushels by the government agency, which would be down by nine per cent from the previous year and at the lower end of trade estimates.

Meanwhile, corn production is expected to increase by four per cent, to 15.03 billion bushels.

Total U.S. wheat production is forecast to be relatively steady on the year, up by less than one per cent at 1.897 billion bushels.

Soybean ending stocks for 2018-19 were raised to 995 million bushels, from an expected 985 million in April. The 2019-20 carryout is forecast at 970 million.

U.S. corn ending stocks for the current marketing year were raised by 60 million, to 2.095 billion bushels. The 2019-20 carryout of 2.485 billion bushels topped the high end of trade guesses.

Wheat ending stocks in the country are forecast to rise to 1.141 billion bushels by the end of the 2019-20 marketing year, from an anticipated 1.127 million in 2018-19.

On the world stage, e USDA raised its South American corn production estimates, pegging Argentina’s crop at 49 million tonnes and Brazil’s at 100 million. That compares with the April estimates of 47 million and 96 million respectively.

Brazil’s soybean production estimate was left unchanged at 117 million tonnes, while USDA raised its prediction for Argentina’s soy crop by one million tonnes, to 56 million.

World wheat carryout for 2019-20 is forecast by USDA to rise to 293 million tonnes, from 275 million in 2018-19. Soybean stocks are forecast to hold steady at around 113 million bushels, while 2019-20 world corn ending stocks at just under 315 million tonnes are projected to tighten by about 11 million bushels.

— Phil Franz-Warkentin writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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Scott Capinegro, a broker with Barrington Commodities at Barrington, Ill., believes prices for corn and soybeans are currently too high.

“(The world) continues to plant, plant, plant,” he said, adding “the world is flushed with grain and something has got to change.”

Despite that abundance in the world, Capinegro predicts there will be more corn grown in the U.S. in 2019 compared to this year.

In its world agriculture supply and demand estimates (WASDE), the U.S. Department of Agriculture estimated the country’s 2017-18 corn production to have been 14.604 billion bushels and predicted 2018-19 production to increase to 14.626 billion.

USDA estimated world corn production for this year was 1.076 billion tonnes and predicted almost 1.1 billion for 2018-19.

Capinegro explained increases in ethanol production will help alleviate the looming supply problem, as China moves to expand its ethanol use over the next few years.

In the U.S., the Trump administration is pushing to make E15 gasoline, which contains 15 per cent ethanol, more readily available. However, Capinegro said these moves will only help to an extent, as the popularity of electric vehicles continues to climb upward and eventually reduce demand for corn.

“That’s going to start taking away some usage of ethanol here,” he said.

Another factor contributing to overproduction, according to Capinegro, has been genetics which have made crops more resilient. Where adverse weather would have resulted in lower yields in previous years, crops are now better able to contend with bad conditions.

Capinegro said the South American soybean crop is expected to be pretty good and their harvest is likely to begin in about three weeks. USDA has projected Brazil’s 2018-19 soybean crop to top 122 million tonnes and Argentina’s at 55.5 million.

Capinegro said China agreed to purchase more U.S. soybeans, but their purchases haven’t had a major impact yet.

“We’re so far behind in sales with them. Even if they came in and bought 200 million (bushels), down the road into spring, we’re still with a carryout of 700 (million bushels),” he stated.

The 2018-19 U.S. soybean carryout was predicted to be 955 million bushels, according to USDA.

Capinegro said China has been trying to demonstrate good faith in resolving its trade war with the U.S. in buying more soybeans, corn and cattle. With a South American soybean crop soon available, he wondered where China will look to for its purchases.

“It will start being a battle of the prices — who’s the cheapest, and all that stuff.”

— Glen Hallick writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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The U.S. Department of Agriculture, in a report released Wednesday, pegged average corn yields at 181.3 bushels per acre — up by about three bushels per acre from the August report and well above even the top end of trade guesses.

Total corn production was raised to 14.827 billion bushels, from 14.586 billion in August. That would be up by about 225 million bushels from 2017-18.

“It’s pretty hard to believe that the corn yield was that high,” said Scott Capinegro, of Barrington Commodity Brokers, pointing to excess moisture and adverse growing conditions in a number of key growing areas. “It’s mind-boggling… what weather could kill the corn yield?”

Capinegro expected the bearish yield number would likely cause the December corn contract to fall below $3.50 per bushel within the next few days (all figures US$). The contract settled Wednesday at $3.525.

“The yields for corn blew away analysts’ expectations,” said Terry Reilly of Futures International. “The sheer amount of corn out there… is just bearish,” he said placing a nearby downside target in the December contract of $3.40 per bushel.

Soybeans moved higher following the USDA report due to the unwinding of spreads with corn, but Capinegro said the bean market was also looking bearish barring any developments on the trade front with China.

USDA pegged U.S. soybean carryout stocks for 2018-19 at 845 million bushels, which was up from the August estimate of 785 million and well above the 395 million-tonne ending stocks for 2017-18.

USDA pegged soybean yields in the country at 52.8 bushels per acre, which compares with the August estimate of 51.6 bushels per acre and the year-ago level of 49.1 bushels per acre.

November soybeans touched a fresh contract low of $8.2125 per bushel at one point during Wednesday’s trading session, but managed to settle at $8.40. With the underlying fundamentals looking relatively bearish, “we could test $8.05 in the beans,” said Reilly.

Wheat futures were also pressured by Wednesday’s USDA report following an upward revision to world wheat stocks. The government agency pegged world wheat carryout at 261.29 million tonnes, up by about 2.3 million from the August estimate and well above average trade estimates that had predicted a downward revision.

USDA raised its estimate for Russian wheat production by about three million tonnes, “which threw a nail in the coffin” of the wheat market, according to Reilly.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting. Follow him at @PhilFW on Twitter.

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The Agricultural Market Information System (AMIS) Market Monitor report for July said the record corn harvest in 2017-18 will slip by more than four per cent in 2018-19. That’s due mostly to smaller harvests in Brazil, Argentina and the U.S.

Corn production is estimated at 1.045 billion tonnes for 2018-19, down from June’s estimate of 1.047 billion and from last year’s 1.091 billion tonnes. The U.S. Department of Agriculture has estimated corn production at 1.052 billion tonnes for 2018-19.

Wheat production is also forecast to fall in 2018-19, mostly because of declines in China, the European Union, Russia and Ukraine. AMIS forecasts 2018-19 production to come in at 736.1 million tonnes, compared to 756.8 million in 2017-18.

Soybean production is virtually unchanged in the July report, which confirms a strong year-over-year increase in production from Argentina, Paraguay and Uruguay. AMIS forecasts soybean production for the 2018-19 crop year at 359.6 million tonnes, compared to 358.3 million tonnes last month, and 337.9 million tonnes in 2017-18.

The report also trimmed wheat stocks significantly from its June report to 264.2 million tonnes from 283.4 million.

Corn stocks are trimmed slightly to 260.3 million tonnes from 262.4 million in June. That would put ending stocks for 2019 at the lowest levels in five years. Last year they were 309.9 million tonnes.

Soybean ending stock forecasts for 2018-19 are raised to 39.2 million tonnes, from 36.7 million tonnes in June. That compares favourably to 2017-18 ending stocks of 39.5 million tonnes.

The report also cautioned that trade tensions between the U.S. and China, which have already roiled soybean and soymeal prices, will continue to have strong spillover effects on all oilseeds.

The AMIS report is a collective analysis of its member organizations: the United Nations Food and Agriculture Organization, the International Fund for Agricultural Development, the International Food Policy Research Institute, the International Grains Council, the Organization for Economic Co-operation and Development, the UN Conference on Trade and Development, the World Bank Group, the World Food Programme, the World Trade Organization, and Global Agricultural Monitoring.

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Corn futures fell to life-of-contract lows, while soybeans turned higher in a recovery from four-month lows in the wake of the midday USDA supply and demand data.

The government raised its estimate for U.S. corn production due to record-large yields and trimmed its estimate for the U.S. soybean harvest, even as that crop remained the biggest ever.

USDA estimated 2018 winter wheat plantings at 32.608 million acres, the smallest since 1909 but above analysts’ expectations for 30.1 million to 32 million.

“The biggest thing was the wheat acres being up instead of down,” said Linn + Associates analyst Roy Huckabay. “I’ve got 1.5 million more wheat acres than I thought I had, and that means I’ve got to reduce my new-crop corn and bean acres.”

Chicago Board of Trade March wheat finished 12-3/4 cents lower at $4.20-1/2 per bushel, its lowest price since Dec. 20 (all figures US$).

CBOT March corn dipped to a contract low of $3.45-1/2, before trimming losses to settle at $3.46-1/4, down 2-1/2 cents.

“We were talking about a (corn) reduction, and we didn’t get it, and so I think that’s why we’re seeing the market sell off,” said Price Futures Group analyst Jack Scoville.

CBOT March soybeans gained 10-1/2 cents to $9.60-1/2 per bushel, rebounding from a session low of $9.44-1/2. It was the biggest one-day bounce in soybeans in 2-1/2 weeks, but prices still lost 0.9 per cent for the week.

USDA earlier announced a sale of 320,000 tonnes of U.S. corn to unknown destinations, the largest one-day sale of the crop since November.

China’s soybean imports in December were nearly record-large, according to Reuters calculations based on customs data. The country, the world’s largest soybean buyer, was experiencing strong demand in the run-up to next month’s Lunar New Year holiday.

— Michael Hirtzer reports on commodity markets for Reuters from Chicago; additional reporting by Karl Plume in Chicago, Mark Weinraub in Chicago, Nigel Hunt in London and Naveen Thukral in Singapore.

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USDA also trimmed its view of soybean production, although the 2017 crop remained at record levels due to an increase in harvested acres.

The government’s estimate of winter wheat plantings was 32.608 million acres, the lowest since 1909 but above a range of market forecasts.

The massive corn and soybean harvests flooded country elevators and strained storage bins. USDA said that both corn and soybean stocks as of Dec. 1 were the highest on record.

The increased corn production also caused USDA to boost its 2017-18 ending stocks view for the yellow grain. Soybean ending stocks were raised too, largely due to a cut in the export forecast for the oilseed.

USDA pegged the corn harvest at 14.604 billion bushels, up from its previous forecast of 14.578 billion. Average corn yields were 176.6 bushels per acre.

Analysts, on average, had expected the government to show total corn production of 14.579 billion bushels, according to a Reuters poll. Analysts had estimated the average corn yield at 175.4 bushels per acre.

Soybean production was pegged at 4.392 billion bushels, down from USDA’s last estimate of 4.425 billion bushels. The average yield was cut to 49.1 bushels per acre from 49.5 bushels per acre. Both soybean yield and production came in below the average of analysts’ forecasts.

USDA said soybean harvested acreage was 89.522 million and corn harvested acreage was 82.703 million.

Soybean stocks as of Dec. 1 stood at 3.157 billion bushels, up from 2.899 billion a year ago. Corn stocks as of Dec. 1 rose to 12.516 billion from 12.383 billion a year ago.

Wheat stocks as of Dec. 1 fell to 1.874 billion from 2.079 billion.

U.S. ending stocks of corn for the 2017-18 marketing year were seen at 2.477 billion bushels, up 40 million from the government’s December estimate. USDA boosted the domestic soybean ending stocks forecast to 470 million bushels from 445 million.

For soybeans, it cut the U.S. export outlook by 65 million bushels amid rising demand for shipments from top competitor Brazil. It raised its estimate of the Brazil crop to 110 million tonnes and the export outlook for that country to 67 million tonnes.

— Reporting for Reuters by Mark Weinraub.

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“It appears that the trend is headed toward larger (corn) crops,” said Myron Krahn, president of the Manitoba Corn Growers Association. Better varieties were helping yields in the province, he added, while farmers were also getting better at growing the somewhat intensive crop.

Manitoba grew 1.17 million tonnes of corn on 330,000 harvested acres in 2016, according to Statistics Canada data. The acreage and production were both the second largest ever for the province, but average yields of 139.4 bushels per acre far surpassed the previous record and compare with the prior five-year average of 114 bu./ac.

“There was a period of time during the growing season where it looked like (the corn crop) might not even reach average (yields),” said Krahn.

However, he said, while some fields will be left to overwinter, the end result was better than expected in most cases.

“Long-time growers are putting more corn in, because with the yields we’re getting it’s proving to be profitable,” said Krahn, adding “that’s also enticing new growers to enter the corn business.”

The initial front-end costs for growing corn are high, as specialized equipment is needed, as are grain dryers and extra bin space, he said.

However, those high costs of entering the corn business serve to keep those growers who made the plunge growing corn year after year.

From a pricing standpoint, Krahn said current spot prices in Manitoba of about $3.80 to $4 per bushel are nearing the “tipping point” where some farmers may be looking at other cropping options.

While those prices are still profitable in Manitoba with good yields, he said farmers would rather see $4.50-$5 per bushel.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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StatsCan’s harvest report, released this week, also showed the large wheat crop in Ontario was a record, with a 56 per cent increase in acreage over 2015 and a record high average yield of 90.9 bushels per acre.

The corn crop showed a 7.1 per cent decrease in average yield in 2016 from 2015 to 158.5 bushels per acre. There was some decrease in area harvested for a total decrease in grain corn production of 8.9 per cent to eight million tonnes.

“The drought that went through Ontario in this past year reduced yields in some areas,” said Richard Smibert, president of London Agricultural Commodities. “Other areas that had timely rain had record crop harvests.”

Ontario’s reduction in corn production also drove a national decline of 2.7 per cent in corn output. Nationally, however, average yield was above the five-year average.

Ontario’s average bushels per acre for corn were about on par with what the trade was expecting.

Don Kabbes, general manager of Great Lakes Grain, said the company estimated 153 bushels per acre from their summer crop tour. Great Lakes Grain is the grain marketing arm for the AGRIS and FS co-operatives.

“At the Outdoor Farm Show some people thought we were on the higher side, but the thought is that what we gained is in test weight.”

The drop in yield will mean more corn will need to be imported into Ontario, maintaining the current import basis.

“It was just too hot and too dry for a portion of the summer, especially through pollination. It was too droughty,” said Kabbes. “You can find lots of pockets where corn was almost zero.”

StatsCan’s previous report in September had predicted a 165-bushel-per-acre harvest in Ontario.

“Leading up to the release of this final harvest report, the trade seemed to have priced in a slight decrease in yield versus both last year’s crop and September’s 165 bushel per acre estimate – which the trade considered slightly aggressive,” said Jenny Van Rooy, grain broker and part owner of The Westland Corp.

“In the days and weeks leading up to harvest we didn’t see much fluctuation in local basis due to this fact.”

Corn quality is also a concern, with pockets of high vomitoxin levels throughout the province. Some corn is being rejected, some discounted and some farm elevators are blending corn to get it to an acceptable level, Smibert said.

“It’s a problem for commercial ethanol plants, it’s a problem for feed mills, it’s a problem for everybody,” he said.

“The big story continues to be vomitoxin,” VanRooy said. “This is something the trade did not fully price in for, and is creating an opportunity for growers with low vomitoxin levels in their corn.”

Soybean production was also down, 9.5 per cent lower than in 2015.

The drought didn’t hit soybeans as hard as corn, with average yield down 1.9 per cent compared with 2015. Acres of soybeans harvested fell 7.8 per cent, to 2.7 million.

“Beans at 45.9-ish… that’s pretty close,” said Kabbes. “Our crop tour was 47.6. Beans could be a bushel on the lower side. Beans in the south west part of the province just rolled in.”

Manitoba continued to expand its soybean space, adding 27.2 per cent higher production in 2016 over 2015, with growth in both acreage and yield.

Ontario wheat numbers for 2016 are skewed due to the extremely low harvest in 2015 from the wet fall in 2014, which meant half the usual acres were seeded.

However, the average yield of 90.9 bushels per acre of wheat is a record, thanks to the open spring with timely rains.

“It was a great wheat crop, with great quality and record yields,” said Smibert.

More wheat will be used for feed in Ontario over the next year, he said, due to the lower-volume and -quality corn crop.

— John Greig is a field editor for Glacier FarmMedia based at Ailsa Craig, Ont. Follow him at @jgreig on Twitter.

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