Changes in wheat production in WASDE estimates had been anticipated, possibility of export tax on Russian wheat looms large

10-Dec-2020 - Last updated on 10-Dec-2020 at 18:19 GMT

In terms of wheat, the December USDA WASDE has been largely overshadowed by the possibilities of an export tax being placed on Russian wheat later this season, said Peter Collier, analyst, CRM AgriCommodities.

The changes in the latest forecast were largely expected with Australian production increased to 30MT (although still below the ABARES estimate, so expect further upward revisions in January), he noted.

Canadian production was also increased marginally to 35.18MT, reflecting StatsCan and Russian production was raised to 84MT, with total season exports increased to 40MT.

“Overall, a rather uninspiring final WASDE of 2020 and arguably a slightly bearish tone to finish the year,” remarked the analyst.

Corn

The US Department of Agriculture (USDA) report left US corn estimates largely unchanged and production for Argentina was reduced 1MT, but increased beginning stocks completely offset this, he said.

Brazilian production was not altered either but Chinese import estimates were raised to 16MT.

“There is still a feeling that, at 16MT, there is further headroom for total season Chinese imports, but this is only likely to be seen later in the season should purchases of Brazilian corn be made.

“Again, a relatively calm WASDE, although arguably slightly supportive with potentials for downgrades for Brazilian production in January,” said Collier.

Soybeans

Due to increased estimates for domestic demand, the December WASDE decreased US soybean ending stocks once again, down to 4.76MT (408KT down month on month), reported the grain and oilseed market specialist.

The continued tightening of on paper US supply has the potential to maintain support for Chicago soybeans, he commented.

The other changes in the USDA WASDE were minimal, with Chinese and Brazilian supply and demand figures virtually unchanged.

“Overall, a slightly supportive USDA WASDE, there is very little room now for any additional Chinese purchases of US soybeans. The oilseed market remains very tight into Q1 of 2021.”