The USDA World Ag Supply & Demand report dominated last night’s markets. A brief look at the report reveals the following points of interest.
Wheat: The USDA’s first stab at the 2021-22 crop is out. Global production is estimated at 788.98mt, that’s 12.88mt bigger than last year. A reduction of 4.77mt in carry in helps a lot and an increase in consumption all but takes care of the difference leaving just a slight year on year increase in carry-over stocks.
Not the tightening we need to see to ensure higher new crop values are sustainable but with the season still a long way in front of us it does present the market with potential upside if conditions deteriorate in N.America or other major producers like Russia, France or Argentina.
Australian wheat production is expected to contract 6.0mt to 27mt and carry in will grow significantly from last year, back to pre-drought levels of about 5.6mt. An increase in exports and domestic consumption is expected to see carry out fall 800kt to 4.8mt though.
China’s expected wheat carry in is pegged at 145.43mt, production at 136mt and demand at 148mt. With imports estimated at 10mt this will see a reduction in carry out of 3mt to 142.43mt.

Generally, looking at the 2021-22 table shows that most major exporters are looking at an increase in carry out stocks, Australia is one of the few exceptions. This will continue to cap wheat values unless they are assisted higher by the likes of corn and soybeans, which is currently the case. Corn ending stocks globally should increase in 2021-22 by about 10mt, nearby prices will not carry into 2022 if so.