Last night was a ‘big data’ night, with all eyes peeled on the USDA’s WASDE (World Agricultural Supply & Demand Estimates) report. It did not disappoint. Firstly, and somewhat unsurprisingly, the USDA lifted global wheat production citing improvement in Russia (0.5mmt), Australia (1.5mmt) and Canada (0.2mmt). Where they caught the market off guard was by decreasing ending stocks by around 4mmt to 316.5mmt (compared with trade average 321mmt).

Increased exports lay at the heart of the decline in stocks.  China continues to be an active market participant, with 8.5mmt imported to date. This is the highest since 1995/96.  Pakistan is also seen trying to build stocks, having imported 2.5mmt this year.

There were relatively minor adjustments made to corn and soybean inventories. It should be noted that 1mmt was wiped off both the Argentinian corn and bean crops.

Further adding support to the wheat market last night was reports out of Russia that President Putin is considering a tax/duty on wheat exports to help curb food inflation.  It seems a little strange to resort to these tactics for a country that has produced an 85mmt crop. Freight prices, a low Rouble, reluctant farmer selling have seen the price for wheat, flour, sugar and veg oils surge.

The tightening of global stocks has seen a welcome bounce in wheat prices after a period of sustained falls. On-going demand, particularly from China will be critical to maintain this momentum shift.

Commodity Conversations

The week ahead….

Expect the market to stall as we head into the Christmas period.  The new year should provide some relief for cash markets as the trade can reset credit limits and start to buy grain again ahead of a busy export program.

Have any questions or comments?

We love to hear from you!

Click on graph to expand

Click on graph to expand

Click on graph to expand

Data sources: USDA, Reuters, CRMAgri, Mecardo

Make decisions with confidence- ask about our board packs, bespoke forecasting and risk management services

Have any questions or comments?

We love to hear from you!
Close up image of green wheat head
Grains & Oilseeds

Bulls are getting hungry

In light of the latest reasonably bearish WASDE report, the ag commodities have had a sharp correction. The start of the so-called ‘big data week’

Read More »
weather map
Grains & Oilseeds

Quick trip around the World

In the not so distant past, grain trading houses put huge emphasis on crop condition analytics, reports from ‘boots on the ground’ and anything else

Read More »

Don’t have an account with us? Join free.

You can have full premium access to all of our content with a monthly or annual subscription. 

Alternatively, create a free account to access our Insights blog and two free premium article a month!

Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published

Commodity conversations podcast cover image, a illustration of a sheep standing on a cow's back with grain either side
Listen to the podcast

Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.

Photo of a farmer surrounded by Merino sheep in dusty yards
Research: Analysis of the Australian sheep flock

In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making. 

Image of harvested grain pouring into a chaser bin
SERVICES AND CAPABILITIES STATEMENT BROCHURE

We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.