Agri-commodity market tracker: USDA releases lacklustre WASDE report

09-Feb-2023 - Last updated on 09-Feb-2023 at 12:02 GMT

The February WASDE is often somewhat limited in terms of market impact, and this year again it proved to be the case, finds a CRM Agri review.

The latest USDA World Agricultural Supply and Demand Estimates (WASDE) report was published yesterday.

The main developments were the conservative adjustments made to Southern Hemisphere production, said the UK analysts.

Following a bumper crop, the US Department of Agriculture (USDA) increased Australian wheat production estimates from 36.6Mt to 38Mt, while also forecasting higher output for Russian wheat - estimates were raised by 1Mt to 92Mt.

And global ending stocks for the wheat market are thus predicted to jump from 268.39Mt to 269.34Mt.

Global wheat consumption is increased 1.4Mt to 791.2Mt, mainly on higher feed and residual use by Canada, EU, and Russia.

Corn market outlook

Corn production estimates for Argentina were trimmed from 52Mt to 47Mt. The US agency also shaved its estimates for US corn domestic use while raising those for ending stocks, from 31.54Mt to 32.17Mt.

Meanwhile, it forecasts higher Ukraine corn exports, anticipating volumes growing from 20.5Mt to 22.5Mt, with EU imports increasing from 21.1Mt to 23.5Mt.

“Other than the trim to Argentina, and a slight reduction to US demand, the February changes [for corn] were relatively minor,” reported the CRM Agri team.

Global soybean prospects

There is evident confidence around prospects for soy production in Brazil, with estimates at 153Mt left unchanged. As drought has impacted Argentina, the USDA is reducing its estimates for that country’s soy output from 45.5Mt to 41Mt.

From a US perspective, US ending stock estimates were eased to 6.13Mt from 5.72Mt, despite still strong exports, noted the UK analysts. Soybean crush there is forecast at 2.23 billion bushels, down 15 million from last month on lower domestic soybean meal disappearance and a higher soybean meal extraction rate.

Ukraine grain corridor

With the WASDE providing little excitement, investor focus in wheat markets diverted to comments from Russia’s foreign minister that the Black Sea grain export deal had done too little to benefit its own exports, with the official terming progress on that score “unsatisfactory”, reported the CRM Agri team.

The UN-brokered Russia-Ukraine grain corridor deal is up for renewal next month.