23 August 2012
US maize and soyabeans production outlooks were the main focus of market activity. Rains were considered too late for maize, with output still expected to decline steeply year-on-year (y/y), while precipitation was only considered to have stabilised the soyabean crop’s condition at best. While prices were pressured by profit taking at times, the GOI sub-Indices for both showed month-on-month (m/m) net increases, rising by 1% and 3%, respectively.
Global wheat values continued to respond to strength in rowcrops, but were also supported by a worsening outlook for Black Sea and Australian wheat. Black Sea exporters captured a high proportion of recent demand, but availabilities were soon expected to become short. However, good prospects for spring wheat harvests in North America capped overall price gains, the GOI subIndex virtually unchanged m/m.
The IGC’s daily rice index advanced marginally in the past month, although markets were mixed, with values easing in Thailand and rising elsewhere, including in Vietnam. Gains were limited by generally bearish fundamentals: global ending stocks in 2012/13 are projected to be broadly unchanged on the previous year, with supplies in the major exporters, notably in Thailand and India, expected to remain comfortable.
This month’s report includes a market focus examining the US Renewable Fuel Standard and recent requests for a partial waiver. A second market focus provides a review of volatility trends in grains and oilseeds futures during the past three months. Day-to-day price swings were initially more pronounced, reflecting growing uncertainty about crop prospects and external influences. However, as more information became available about likely crop losses, volatility eased, especially for maize.
OUTLOOK FOR 2012/13
WHEAT: World wheat production in 2012/13 is placed 3m t lower than last month at 662m, some 34m below last season’s record. Food and industrial consumption are expected to grow, but feed use will likely be lower. World stocks are forecast to contract by 17m t, to 180m. A projected fall in the major exporters is led by the Black Sea region. World trade is forecast to be 13.3m t below last season’s record, at 132.7m, mainly due to lower imports for feed.
MAIZE: Drought has further stressed crops across the northern hemisphere, with world production forecast to drop by 4%. Exportable supplies in the US and Ukraine have tightened and, while the next crops in Brazil, Argentina and South Africa may be large, harvests are still several months away. A smaller crop will result in a drop in consumption, the first since 1993/94. World stocks are forecast to fall to a nine-year low, including a particularly steep decline in the major exporters.
RICE: World rice production in 2012/13 is projected to rise to a record 466m t (464m). However, at just 0.4%, the expansion will be smaller than in recent years. After the previous year’s solid output-led expansion, consumption is set to increase only modestly, to 465m t (459m). With global production and use broadly in balance, the world carryover is set to show little change, including only a modest rise in major exporters’ stocks. World trade in 2013 is projected to rise slightly, to 34.8m t.
OILSEEDS: World 2012/13 soyabean production is projected at 255m t, up by 7% y/y as a rebound in South America compensates for a disappointing US crop. Expanding feed demand in China will continue to shape world soyabean trade, forecast at a record 94.0m t, up 2% y/y. Global soyameal trade is expected to be little changed, at 57.2m t. A record rapeseed/canola outturn in Canada should more than offset disappointing crops elsewhere, with global production up slightly, to 60.6m t, close to the 2009/10 record. Larger shipments to the EU and China are set to boost world rapeseed/canola trade by 5%, to 12.5m t.
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