Wheat, soy prices to fall in 2015-16 – unlike corn values

March 4th, 2015

By:

Category: Grains, Oilseeds

Soybean-Oil-Basis(Agrimoney) – Prices of higher protein US winter wheat will fall further next season, with soybean values on course for a nine-year low – contrasting with improvements on the cards for barley and corn, Abares said.

The Australian commodities bureau cut by $15 a tonne to $270 a tonne, equivalent to $7.35 a bushel, its forecast for prices of hard red winter wheat in US Gulf ports in 2014-15.

And it forecast a further drop to a six-year low of $265 a tonne in 2015-16, citing the prospect of a smaller world harvest, seen falling 13m tonnes to 707m tonnes, but one of higher quality than last year, when harvest rains lowered crop specifications in many countries, including France, Romania and Ukraine.

“Assuming average seasonal conditions in 2015–16, an increase in the supply of high-quality milling wheat is expected despite an overall decline in world wheat production,” Abares said.

“In the previous year, there were low supplies of milling grade wheat, including hard red winter wheat, in the US and harvest quality issues in other major wheat producing countries.”

Abares’ estimate for world wheat production is in line with forecasts of 705m tonnes from the International Grains Council and of 710m tonnes from Canada’s farm ministry, AAFC.

‘Increase in demand’

On corn, Abares was significantly more generous with its world production forecast for 2015-16 –seen down 25m tonnes at 965m tonnes – than the IGC, which last month, in its initial estimate, pegged output at 938m tonnes

Abares forecast a US corn crop of 345m tonnes, equivalent to 13.59bn bushels, a drop of 4.4% year on year and bang in line with the US Department of Agriculture’s own initial estimate for the harvest, released two weeks ago.

However, the bureau also expected an 11% slide to 65m tonnes in European Union output, reflecting the impact of a forecast 6% drop in sowings, compounded by a drop in yields from elevated 2014 levels.

Abares forecast a rise in corn prices, as measured at US Gulf ports, of $15 a tonne to $193 a tonne in 2015-16, equivalent to $4.90 a bushel.

The rise “reflects an expected increase in demand for corn and a forecast decline in production from the record achieved in 2014–15”.

Soybean prices to fall

The bureau was also upbeat on barley prices, seeing values of feed barley as measured in the French port of Rouen rising to $226 a tonne next season from $208 a tonne in 2014-15, again reflecting ideas of lower production, albeit a far smaller drop than for corn, of 1m tonnes to 138m tonnes.

However, among oilseeds, soybean prices, as measured in US Gulf ports, were seen dropping by $33 a tonne to $390 a tonne, the lowest since 2006-07.

“This reflects an expected increase in stocks to record levels,” Abares said, forecasting world soybean stocks hitting 102m tonnes at the end of 2015-16, including rises in all three main exporting countries, Argentina, Brazil and the US.

Crop stocks held in major exporting nations, in being readily available to the world market, often have an unusually large impact on prices.

Abares forecast US soybean production this year at 104m tonnes, equivalent to 3.82bn bushels, some 20m bushels above the USDA estimate, despite factoring in a bigger acreage figure.

Add New Comment

Forgot password? or Register

You are commenting as a guest.