Canada Markets

The FAO's Agricultural Market Information System (AMIS) released its latest global projections for the 2013/14 crop year to indicate that the global crop for wheat, corn and soybeans may be larger than previous estimates. This information comes a week in advance of revised supply and demand estimates from the USDA on Sept. 12.

The projection for a 710 million metric tonne global wheat crop would reflect a record crop and a significant 8.4% increase over the USDA's most recent 655.27 mmt production estimate for 2012. This estimate exceeds the July AMIS estimate of 704 mmt, as well as the USDA's August estimate of 705 mmt. The largest improvements in crops were seen in Europe and the Black Sea countries, while China, Argentina and Canada were mentioned as also having a more favorable outlook.

Ending stocks for wheat were increased by 1 mmt from the July estimate to 170 mmt, which remains below the August USDA estimate of 173 mmt. 2012/13 ending stock estimates is pegged at 157 mmt by AMIS and 174 mmt by the USDA. Despite the sharply higher global production forecast, increased trade with both Egypt and China may act to keep stocks from growing excessively.

AMIS also increased global soybean production in 2013/14. The forecast was increased to 284 mmt, which would be 6.8% above the 2012/13 AMIS estimate of global production of 266 mmt. Production gains across India, Argentina, Brazil and the U.S. are behind the increase. AMIS sees ending stocks growing 24% to 31 mmt from the estimated AMIS 2012/13 carryout, while this carryout is well below the most recent 2013/14 carryout of 72 mmt estimated by the USDA in August.

The AMIS corn production estimate was lifted to 983 mmt, which is above the 972 mmt projected in July and the estimated 875 mmt production estimate for 2012/13. In August, the USDA pegged global corn production at 957 mmt. Ending stocks are expected to increase 30% from the 135 mmt projected for 2012/13 to 176 mmt, while the USDA most recently reported 2013/14 ending stocks at 150 mmt.

All eyes will be on the USDA's report next week which will outline its perspective of global supply and demand. In the mean time, as harvests advance in many countries and the numbers continue to reflect larger production, it may be difficult to imagine price appreciation while stocks continue to grow.

Cliff Jamieson can be reached at cliff.jamieson@telventdtn.com

(ES)

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