Agriculture Net Sales Support Outlook

September 19, 2023

Better than expected Current Marketing Year (CMY) net sales aid main agriculture futures to sustain levels after Russian oversupply.


Weekly Wheat CMY net sales retrieved, but global outlook is bearish

  • Wheat futures, settled in September, traded -13.2% lower in an active month.December contracts started strong, surpassing the $6/bushel benchmark, amid stronger than expected Current Marketing Year (CMY) net sales.
  • Nevertheless, monthly supply and demand estimates from the US Department of Agriculture (USDA) published the previous week suggest wheat inventories among major exporting countries will fall to 13.5% in 2023-24 from 15.1% in 2022-23.
  • In addition to this, USDA’s latest forecasts showed a supply contraction among key exporters based on poor weather. Wheat crop outlooks for 2023-24 in Argentina, Australia, Canada and the EU fell a combined 7 million metric tons (mmt) from last month’s figure, and those countries are slated to export 91 mmt this year.




Corn futures showed resilience during volatile September 


  • CMY net sales strengthened by approximately 753.2 mt from last week (data as of Sep 07, 2023 from FAS), while the September contract ended cumulatively lower by -7.4% as a front-month contract.
  • USDA raised its outlook for the corn harvest, primarily due to the extensive acreage planted.
  • The USDA’s monthly World Agricultural Supply and Demand Estimates report showed that while this year’s US corn yield is below the trend, it is still expected to be the fifth highest on record.
  • Additionally, large shipments from Brazil offset the demand for US corn.
  • The EU anticipates that summer rain has aided the crop conditions greatly, prompting the Consultancy Strategie Grains to spike its forecast for the EU’s 2023 maize crop by nearly 1 million metric tons to 59.6 million.




Soybeans futures appreciated, supported by positive outlook


  • Soybeans CMY net sales showed the biggest weekly increase from early March of the current year, rising 548.3 mt (data as of Sep 07, 2023 from FAS). The Soybeans September contract strengthened by +1.5% during the period as the active contract.
  • The USDA projected a soybean harvest of 4.146 billion bushels, broadly in line with market expectations of 4.157 billion bushels, after hot and dry conditions during key stages of growth hampered harvest potential.
  • Despite falling below the trend, soybean yields are anticipated to be the fifth-largest on record.
  • Meanwhile, China is expected to set a record for soybean imports in the 2022-23 period. During the first ten months of this period, imports rose by 10% from a year earlier to 84.3 mt.