WASDE: Tighter US corn and soy supply but USDA sees boosted wheat output for Ukraine

13-Jan-2023 - Last updated on 13-Jan-2023 at 09:03 GMT

The first USDA WASDE of 2023 has certainly proved to be a significant one with revisions to multiple global major producing nations, says CRM Agri.

The US Department of Agriculture (USDA) released the latest World Agricultural Supply and Demand Estimates (WASDE) report yesterday.

Looking to corn, and there has been an unexpectedly large cut to the US corn planted area estimate. Production is forecast at 348.75Mt, down from 353.84Mt. “Exports were also trimmed, down from 52.71Mt to 48.9Mt in what has been a surprise cut to US stocks,” noted the UK analysts.

Production for Argentina was also reduced due to the lingering drought conditions, down 3Mt to 52Mt with exports also reduced 3Mt. In addition, corn production in Brazil was decreased by 1Mt.

Global production is pegged downward as well, from 1162Mt to 1156Mt, but exports out of Ukraine were revised higher from 17.5Mt to 20.5Mt as the grain corridor continues to exceed expectations, found the CRM Agri team.

Wheat

Wheat supply and demand estimates were, in general. maintained, other than production in Ukraine, which, again, has been revised upwards to 21Mt from 20.5Mt. There has also been a slight increase in UK production estimates, to 15.5Mt, along with a subsequent increase of ending stocks, they added.

Soy

Like with corn, US soy was clipped, USDA estimates have been reduced from 18.27Mt to 116.38Mt, with the export projection trimmed to 54.16Mt and ending stocks down to 5.72Mt, amending what already was a tight US soybean market far beyond market expectations, said the CRM Agri team.

Again, as with corn, the forecast for soybean production in Argentina was revised downwards to 45.5Mt from 49.5Mt. Brazil’s soy production estimates were raised 1Mt to 153m on higher area.

Foreign 2022/23 soybean crush is reduced by 2Mt mainly for Argentina and China. Argentina’s crush is reduced on lower supplies while crush for China is reduced on a lower than-expected pace during the first quarter of the marketing year. Partly offsetting that is a higher soybean crush forecast for Brazil.

Dollar value

In wider market developments, Brent crude increased by 1.8%, with a now 7% recovery over the past week, while the dollar fell by 0.7% against a basket of currencies to a seven-month low, reported the UK commodity market experts.