Canada Markets

According to Thursday's USDA report, the global crop for both wheat and corn continues to grow in size. Global wheat production in 2013/14 is suggested to be 714.05 million metric tonnes. USDA's initial look at the 2014/15 crop year suggested that wheat production could slip to 697.04 mmt, well below last year's record, although the global production estimate has been increased each month since, with today's report suggesting the potential for a 719.95 mmt crop, a 22.91 mmt or 3.3% increase from the initial estimate.

Meanwhile, global demand is reported to increase only 7 mmt, resulting in a year-end increase in ending stocks. Ending stocks are suggested to reach 196.38 mmt, the highest in three years and above the five-year global average inventory of 190.76 mmt.

While the global corn production estimate for 2014/15 has also increased over time, the increase is not as pronounced as seen in wheat. 2013/14 global production of corn is estimated at 986.68 mmt. USDA's first look at the global crop in May resulted in a 979.08 mmt estimate, while this estimate has increased over time to today's 987.52 mmt estimate. Ending stocks at the end of 2014/15 are suggested to be 16.83 mmt higher than seen in 2013/14 at 189.91 mmt.

In today's Agriculture Market Information System World Supply-Demand Outlook, they describe the wheat and corn situation as having "exceptionally abundant supplies." This is the challenge for our market this crop year, although opportunities may be found in supplying quality wheat to global markets, for those countries that can.

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

Follow Cliff Jamieson on Twitter @CliffJamieson

(ES)

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