USDA crop report signals global food insecurity challenge

FRESH NUM BERS FROM the U.S. government have shown that tighter crop supplies could worsen the foodinequality crisis that is currently ravaging the globe.

The U.S Department of Agriculture stated that world soybean stockpiles will be smaller than expected, indicating growing competition over global wheat shipments and highlighted dry weather as a threat to crops in parts of South America and Europe.

Soybean futures ended up 15-1/2 cents at $10.65-1/2 a bushel, rising to their highest prices since March 2018 after the USDA disclosed inventories will slump to a five year low.

The USDA also cut its forecast for domestic soybean ending stocks by 37% to 290 million bushels, far below expectations of 369 million bushels.

On the other hand, wheat jumped 1-½ cents to $5.933/4 a bushel and corn also increased from 8 cents to $3.95 a bushel, reaching its highest price since October 15, 2019.

The USDA lowered its estimates for domestic corn production by 1.2% to 14.722 billion bushels while soybean production declined 1% to 4.268 billion bushels.

Taken together, the report indicated that global food prices could keep climbing, making adequate nutrition more expensive as economic woes deepen.

The United Nations in its recent release of the gauge of global food prices indicated that costs rose 2.1% in September, mainly driven by grains and vegetable oils.

The index is approaching a multi-year peak set in January as the USDA figures show that the increases could continue as China imports more soybeans and wheat, tightening the global balance sheet.

While global grain and oilseed supplies remain relatively robust, wild weather, including a recent severe wind storm in Iowa means harvests are smaller than initially hoped. Average yields for U.S. corn and soybeans are still record large, though there are fewer acres that will be harvested.

Meanwhile, in top wheatexporting Russia, production was raised by 5 million metric tonnes to 83 million tonnes, the second-biggest ever, according to the USDA’s report. Wheat output was cut in Argentina, Canada, Ukraine and the U.S.

Prices have been surging in Chicago, with investors enticed by a demand-driven rally. Soybeans for November delivery climbed as much as 2.8% to $10.7975 a bushel on Friday.