This month’s WASDE

After what feels like weeks of anticipation (believe me), this month’s World Agricultural Supply and Demand Estimates (WASDE) from the US Department of Agriculture (USDA) were finally released on Friday afternoon (8th November). Due to their being no release of the October edition of the report, a first for more than 40 years, the estimates were expected to bear a few surprises. 8 weeks is a long time in the grain trade when you consider that the world’s largest maize corn crop has entered the harvest period (The US), the Black Sea region has completed their harvest and the EU is finally beginning to reflect on both quality and quantity of this year’s crops.  

Below is a short summary of this month’s report and as always, the full report is available to view in PDF format via the blog section of our website.

Considering the anticipation of this month’s report and given that it has been 8 weeks since the last one, the market hasn’t exactly shifted in the dramatic fashion that we had initially expected. Much of what has been said appears to be more of a confirmation of general trade thoughts rather than anything too surprising.

WHEAT –

·         Global wheat production for the current 2013-14 season is lowered by 2.5M/T since September’s report – 

·         EU production is raised by 0.4M/T due to small increases reported for a number of different countries.

·         US wheat production is raised by almost 380,000/T.

·         Canadian production is raised 1.7M/T.

·         Russian production is lowered by 2.5M/T, mainly due to a poor spring wheat crop.

·         Production for Kazakhstan is reduced by 1.5M/T.

·         Argentinian production is forecast 1M/T lower. Late-season freeze events have reduced prospects for the crop.

·       Total Global wheat supplies for the current 2013-14 season are lowered by 0.8/T since September’s report –

·         This accounts for the above 2.5M/T in production losses, but is slightly offset by larger than previously realised carryover stocks from the previous 2012-13 season (particularly in both the US and the EU).

·       Global wheat consumption for the current 2013-14 season is lowered by 3.0M/T since September’s report –

·         Feed use is lowered for America, China, Russia and the European Union.

·         Food use is lowered for America, India, Russia and the European Union.

(Wheat production is lowered but a higher than expected carryover from last season helps compensate for this. Demand is however also lowered, presumably because of the current price difference between wheat and maize corn).

MAIZE CORN –

·         Global maize corn production for the current 2013-14 season is raised by 6.16M/T since September’s report –

·         US corn production is raised by almost 3.7M/T – The harvested area may be slightly smaller but yields are forecast much higher. If realised, this would be a record crop at 355M/T. The USDA add that “despite a late planted crop and July and August dryness across much of the Corn Belt, cooler-than-normal summer temperatures and an extended growing season have supported higher than expected yields for most producers”.

·         Maize corn production is also raised for Russia by almost 3M/T.

·         EU production is raised by 0.3M/T.

·       Global maize corn consumption for the current 2013-14 season is raised by 5.5M/T since September’s report –

·         Feed use is increased for Russia, the Ukraine, the EU and Turkey.

(The American maize corn crop is on track for record production after a minor weather blip last month although this notion is nothing particularly new to the grain market. Demand is also forecast higher, again presumably because of the current price difference between wheat and maize corn).

OILSEEDS –

·       Global oilseed production for the current 2013-14 season is raised by 4.3M/T since September’s report –

·         US oilseed production is raised 3.3M/T.

·         Global soybean production is projected at 283.5M/T, predominantly due to an increase in US production.

·         Global OSR production is raised to a record 67.9M/T, predominantly due to an increase in production for Canada, the Ukraine and the EU.

·       Total global oilseed supplies for the current 2013-14 season are reduced –

·         Although production is clearly plentiful, carryover stocks from the previous 2012-13 season are much smaller than initially expected. Ending stocks are also expected to be lower than previously thought for the current 2013-14 season.

(Oilseed production is higher than the trade may have expected BUT carryover stocks from last season are much lower than initially thought – enough to slightly compensate for the increase in production anyway).

 

In opening trade this morning we are yet to see any interest in feed wheat for November 2013. The London LIFFE wheat future for May 2014 is currently trading at £167.50/T.

End-user bids are scarce this morning although we do have some interest in a little Nov/Dec feed wheat at £161-2/T ex-farm. Feed Barley is continuing to trade for spot collection at £135-37/T ex-farm with movement into Jan/Feb next year offering £140/T ex-farm.

OSR values are slightly higher this morning with Pre-Christmas collection offering £295-97/

 

To view this month’s report in full, please see:

http://www.usda.gov/oce/commodity/wasde/latest.pdf

 

 


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