WASDE: An optimistic view of global wheat and corn production

13-May-2021 - Last updated on 13-May-2021 at 17:14 GMT

This week saw the USDA release its first official look to World Agricultural Supply and Demand Estimates (WASDE) for next season, alongside the first time that the UK has been split from the EU, an interesting report in what has been a big data week, says CRM Agri.

Looking to next season, and the US Department of Agriculture (USDA) are forecasting a very good season for both wheat and maize production, Peter Collier, senior market advisor, CRM Agri.

“The headline figure for 2021/22 has got to be the Russian wheat production figure, estimated at 85MT, which we view as a bit optimistic. This optimism for production also extends across into Ukraine with a 29MT wheat crop and a 37.5MT maize crop. If realized, then markets are in for a very well supplied Black Sea with building stocks – not a very bullish new crop picture with strong export competition.”

In Europe, and EU-27 wheat production is being estimated at 134MT, far from a record, but certainly better supplied than this current season and with improving rainfall, that has the potential to increase, said the analyst.

“The USDA’s assessment for UK wheat production at 14.1MT is perhaps a little pessimistic given the now improving crop conditions, but it is good to have an alternative, forward looking, supply and demand data set,” said Collier.

Chinese corn demand

Looking to corn markets, and the key takeaway from the WASDE was the USDA’s very conservative approach to Brazilian corn production, he said.

“Given how dry it has been for Brazils second corn crop, the USDA’s minimal 7MT reduction seems too cautious.”

The USDA are assuming a continued strong Chinese corn demand next season, said Collier. “But this is a very large unknown.”

Overall, an optimistic view for global wheat and corn production in 2021/22, but with EU stocks remaining tight and strong global demand reliant upon increasing production, said the market advisor.