The USDA released their world stocks demand estimates last night and quietly put a bomb under the wheat market. Corn and bean stocks came in above trade expectations which set a tone for a lower pricing during the night, but all the attention focused on wheat, where global ending stocks shrank more than the trade estimated. (table 2)
The knockout punch though came with the new crop US wheat production figures that really sent the market flying. (table 3)
All winter wheat production was under trade estimates, ultimately dragged down by the HRW wheat class (Kansas, Oklahoma, Texas etc) and is thought the be the lowest production number since 1963. We knew this area was struggling but these numbers caught the market off guard.
Spring wheat (North/South Dakota, Nebraska etc) will be assessed next WASDE update. This report will be under the microscope as well because the spring wheat classes will need to outperform in order to meet trend line yields, bearing in mind that seeding is well behind schedule.
Other notable estimates include:
Brazilian corn steady at 116mmt.
Russian wheat at 80mmt, with exports at 39mmt.
Canadian wheat at 30mmt versus 21mmt last year.
Ukrainian corn production at 19.5mmt, down from 42mmt last year, with exports around 9mmt. This is going to need a lot of things to go right for this to happen.
Global wheat stocks to use at 14.6% (exc China), the lowest since 2006/07 which was 14.3%.
The savage nature of the wheat adjustments seems a little un-USDA like. They tend to make many small, incremental changes over time. With corn and soybean sowing experiencing sowing delays, I think we can expect a few more adjustments to come.
The week ahead….
There is going to be a lot more adjustment made to an ag market that is on a precipice. Delayed corn and wheat sowing in the US, dry Brazil, Canada too wet/too dry (depending where you are), Ukraine…. This market is a powder keg with any number of fuses waiting to be lit.
Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
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.
Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
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.
Tick, tick, tick … boom!
All winter wheat production was under trade estimates, ultimately dragged down by the HRW wheat class (Kansas, Oklahoma, Texas etc) and is thought the be the lowest production number since 1963. We knew this area was struggling but these numbers caught the market off guard.
Spring wheat (North/South Dakota, Nebraska etc) will be assessed next WASDE update. This report will be under the microscope as well because the spring wheat classes will need to outperform in order to meet trend line yields, bearing in mind that seeding is well behind schedule.
Other notable estimates include:
The savage nature of the wheat adjustments seems a little un-USDA like. They tend to make many small, incremental changes over time. With corn and soybean sowing experiencing sowing delays, I think we can expect a few more adjustments to come.
The week ahead….
There is going to be a lot more adjustment made to an ag market that is on a precipice. Delayed corn and wheat sowing in the US, dry Brazil, Canada too wet/too dry (depending where you are), Ukraine…. This market is a powder keg with any number of fuses waiting to be lit.
Have any questions or comments?
Click on graph to expand
Click on graph to expand
Click on graph to expand
Data sources: Reuters, USDA, K Braun
Categories
Have any questions or comments?
Rally fades as reality sets in
Since last week’s superpower meeting, the ag market has gone on something of a tear. Wheat was up 30¢/bu, corn up 5¢/bu and soybeans up
Harvest twenty percent done
Harvest has kicked off in earnest in NSW and is winding down in Queensland. Victoria and SA have made a start, and we are still
Oilseed markets find support as US–China trade talks progress
This week’s meeting between Presidents Trump and Xi largely lived up to expectations, we think. High on the agenda, and one of the most closely
Looking for a pulse
Despite the rise of canola as a break crop, pulses remain a very important part of the crop rotation for broadacre croppers. In fact, the
Want market insights delivered straight to your inbox?
Sign up to the mailing list to get regular updates to new analysis and market outlooks
Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
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.
MEET THE TEAM
Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
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.