WASDE report: USDA increases Russian wheat crop estimate by 1 million tonnes


RUSSIA’S wheat crop is getting bigger and the former Soviet country will deliver another record this season, according to a key report.

The US Department of Agriculture’s latest World Agricultural Supply and Demand Estimates report, released overnight, increased the Russian crop by 1 million tonnes from last month’s estimate.

The USDA estimates Russian production will reach 82 million tonnes this season, up a staggering 9.5 million tonnes on last year’s record harvest.

The report also lifted global world production by 6.34 million tonnes on the previous month to 751.19 million tonnes, which if realised, would be the second largest world wheat crop on record.

This was helped by a projected increase in EU wheat production by 2.2 million tonnes from September to 151 million tonnes, “largely on higher production in France”, the report said.

The Indian wheat crop is also tipped to be 2.38 million tonnes more than last month and was revised up to 98.38 million tonnes.

However the USDA downgraded the Australian crop by 1 million tonnes to 21.5 million tonnes, in line with the Australian Bureau of Agricultural and Resource Economics and Sciences’ September crop estimate of 21.6 million tonnes.

The USDA report was released just hours after ABARES issued an extraordinary warning that it was likely to downgrade this Australian wheat estimate after poor spring conditions in key grain regions.

The WASDE report also increased ending wheat stocks by 4.99 million tonnes from its September report to a record 268.13 million tonnes.

The increase in global stocks was more than the market’s expectation and in response Chicago Board of Trade December wheat futures were down $2.31 last night on the previous trading session, to close at US430.50 c/bu or $202.33/tonne.

In the past week new season Australian Premium White physical contract prices have fallen, driven lower by widespread rain across Queensland and parts of NSW.

Geelong APW prices are down $18 from October 5 to $264/tonne, while Port Kembla-delivered APW is down $22 to $306/tonne.

In other grains the USDA lowered its yield estimate for the US soybean crop, but increased planting area, resulting in an unchanged production number, which surprised the market, according to analyst Profarmer.

“The market has expected an increase (and) subsequently estimates of both global and US endstocks declined to a larger extent than the market had expected,” the Profarmer newsletter said.

Overnight CBOT soybean contracts outperformed corn and wheat, gaining about 2.5 per cent.


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