The USDA monthly World Ag Supply and Demand Estimate report was out last night. Let’s have a quick look at any changes in wheat.
World production was back 3.3mt to 793.37mt, that’s still a very big crop. There were a number of consumptive adjustments that countered both the lower opening stocks number and the smaller production, the net result was a decline of only 920kt in world ending stocks, now projected at 265.61mt.
The biggest decline in ending stocks was in the Asian markets, Chinese opening stocks were reduced 210kt, production reduced 3mt, Chinese consumption was also reduced 1mt, resulting in a decline of 2.21mt in ending stocks. I’ll be honest, I was expecting to see a bit more off the supply side for China given their weather issues this year. I guess a grade split is what we really need to see for China.
EU wheat production was lower, back 3mt on the July guess. At 135mt it’s not a small crop, as with China a grade spread chart would be nice to see. EU opening stocks were lowered, but so was consumption, the net result was a 1.5mt change in ending stocks, down to 13.16mt, lower but not small.
Canadian opening stocks were left unchanged, production was lowered just 2mt, so there’s plenty of scope for more adjustments lower to that number in subsequent reports. The USDA simply dropped Canadian consumption by 2mt, the same volume as the reduced production by, thus ending stocks were unchanged, but at a very tight 2.54mt. I’m thinking drought times seldom see domestic consumption fall, but hey, I don’t work at the USDA either.
Aussie production was left unchanged, as was Aussie usage. The one country that does make me raise the old left eyebrow in skeptical analysis is the Ukraine data… why does anything to with Ukraine always make that eyebrow lift ?? Ukraine saw production increased to 21mt from 17.5mt, domestic usage was increased to counter 2mt of the production increase, but ending stocks were increased from 1.59mt to 4.13mt, +2.54mt month on month. I have to admit I didn’t see that coming, but nor am I volunteering to go and ground proof their data.