In this months World Agricultural Supply and Demand Estimates (WASDE) report by USDA, there were, on the face of it, very few significant or surprising changes.
Wheat/Barley
Overall there were little changes made to global wheat supply and demand estimates. US stocks increased marginally as did stocks in Argentina due to an increase in export estimates. US ending stocks were raised up 20 million bushels to 648 million bushels (17.64MT).
The global wheat outlook for 2021/2022 is for lower supplies, higher consumption, increased trade and reduced ending stocks. Supplies are projected to fall by 1.1 million tonnes as reduced production more than offsets higher beginning stocks. The majority of production decreases were in the Middle East where Iraq and Syria are reduced due to prolonged dry weather. Concerns over conflict between Russia and Ukraine still weigh on the market.
Soya
The USDA report lowered Soybean production in Brazil and Argentina, which many forecasts had already projected.
Brazil’s Soybean crop is projected at 134 million tonnes, down 5 million tonnes from January. Argentina’s Soybean crop was lowered by 1.5 million tonnes to 54 million. Paraguay’s Soybean crop was also reduced by 2.2 million tonnes to 63 million tonnes. Although a considerable decrease, the projections did not fall in line with earlier private forecasts.
Maize
The USDA elected to leave February estimates for maize supply and use relatively unchanged from a month ago which many anticipated. Chinese maize demand was maintained at 26 million tonnes, maize production in Argentina was also maintained at 54 million tonnes and Brazil maize estimates were downgraded by just 1 million tonnes.
Focus will remain on the dry weather in the South America’s and what potential impacts they may bring to the market. The potential conflict between Russia and Ukraine will also be an indicator to market direction if anything does materialise.
