The USDA August 12 crop report raised US maize yields to a record level of 175 bushels/acre (110t/ha) , a figure which is 4% higher than the trend.Global production is therefore up by almost 20 mt .The ProFarmer crop tour will paint a more accurate picture of the scale of the US harvest .
In Europe ,drought conditions continue in France and eastern Europe , with non-irrigated maize suffering even more .Irrigation limits will also reduce the yield potential of irrigated maize , even though the critical pollination phase is over .
The price of European maize is unlikely to be affected by the excellent production in the USA.This is because the EU must import 13 mt of maize this year and US maize is GM, meaning very little will be imported.
Keep an eye on wheather conditions in the EU and the outcome of the ProFarmer crop tour in the USA.
An increase in demand , and the weather , are supporting US beans .Soybean prices have been treding up on the Chicago exchage thanks to an increase in export demand and the development of weather risks .With regard to the old campaign , the US crushing figures published by NOPA show a slight fall in bean crushing activity during July to 3.91 mt , 1% down on June 2016 .This confirms the protein market is normalising in the USA.This also seems to be the case on the international market , as shipments and export sales of soya meal from the USA are trending down .
Nonetheless , given the good crushing margins for soybeans in the USA ,China and Europe , bean crushing activity is likely to remain stable over the next few months .
On the export market ,however , US soybeans are still great in demand .Given South American availability is low ,the USA is still the only source which is able to supply the international market .Incidentally ,the USDA has revised its export target up to 51.2 mt , an increase of 1.8 mt , for the 2015/2016 campaign .
With regard to the new campaign , wheater conditions in the USA are still generally favourable .On August 19 , the USDA revised its US production estimate up , to 110 .5 mt , thanks notably to a rise in yield to 48.9bu/acre (30t/ha), an increase of 1.8 bu/acre (1.1t/ha) on June .
Nonetheless , we note a few risks : an ongoing and marked rainfall deficit in the Midwest , and heavy rain in the southern states near the gulf of the Mississipi .This region , however , accounts for less than 1% of the USA´s production estimate to 110mt , given these ongoing and slight risks for yields .
Watch out for La Nina and US weather , US exports and port bases , together with international demand.