The USDA has revised forecasts, lowering corn and soybean production for Argentina and Brazil due to adverse weather. U.S. corn and soybean ending stocks remained unchanged, while wheat stocks decreased. China’s grain import projections were also slashed, pointing to market adjustments influenced by economic growth slowing in China.
The USDA has revised its forecasts for corn and soybean production in Argentina and Brazil, attributing the changes to recent unfavorable weather conditions affecting newly planted crops. The projections indicate a reduction of Argentina’s corn crop by 1 million metric tons to 50 million tons, and a decrease in its soybean crop by 3 million tons to 49 million tons. Additionally, Brazil’s corn crop outlook was lowered by 1 million tons to 126 million tons, while its soybean forecast remained steady at 169 million tons. Weather issues, including drought in certain regions and excessive rainfall in others, are impacting the crop health in both countries.
Prices are minimally affected by the USDA’s adjustments. According to Brian Hoops of Midwest Market Solutions, while South American production is generally larger than last year, the current specifications show a reduction from the previous month, hinting at a slightly supportive factor in the market. In the United States, the USDA announced no changes to corn and soybean production estimates, keeping them at 14.87 billion and 4.37 billion bushels, respectively.
Furthermore, the USDA has lowered its predictions for U.S. ending stocks of wheat for the 2024-2025 period. Contrary to prevailing expectations, corn and soybean ending stocks remained steady at 1.54 billion and 380 million bushels, respectively. In contrast, wheat ending stocks were decreased to 794 million bushels, which was below market predictions of 801 million bushels. The decision surprised some analysts, especially given the recent strong export demand for corn.
Additionally, the USDA reported a significant reduction in anticipated Chinese grain imports for the 2024-25 season, particularly corn and wheat. The revised figures stand at 10 million and 8 million metric tons, reflecting a nearly 25% decrease from earlier estimates. While these volumes are lower than in previous years, they remain historically substantial, though they may not favor global grain exporters hoping for previous import levels from China.
Despite record-large domestic harvests, China’s economic growth slowdown is expected to negatively impact agricultural purchases. Recently, China postponed imports of up to 600,000 tons of predominantly Australian wheat and is projected to have a significantly low volume of U.S. corn scheduled for export in 2024-25. These developments indicate a cautious approach to global grain trade as China recalibrates its import strategies.
In summary, the USDA has adjusted its production forecasts for corn and soybeans in Argentina and Brazil due to adverse weather conditions, predicting lower yields for both countries. U.S. ending stocks forecasts show stability for corn and soybeans, with a decrease for wheat, surprising analysts. Additionally, reduced Chinese grain import expectations further reflect ongoing shifts in global agricultural trade dynamics, further influenced by China’s economic conditions.
Original Source: farmpolicynews.illinois.edu
