The USDA World Ag Supply and Demand August Estimates were out overnight. I’ll concentrate on the wheat numbers. Beginning stocks were increased 1.37mt, production was increased 2.09mt to 798.28mt. Imports were increased 1.7mt, total consumption was increased 4.08mt and the net result was a less than bearish decrease of 620kt in the carry out estimate. So a report that is bearish if you didn’t want to see some increases in supply but countered by increases in demand. All in all it’s not terribly bearish or terribly bullish, it’s a bit of a nothing report for wheat.
Looking into some of the details we see Australian production increased 1mt to 30mt, 100% believable given the current season on both sides of the continent. The EU production estimates was slashed 2mt to 128mt, still much higher than a lot of private estimates out there. All the numbers for Russia were unchanged. Argentine productions was left unchanged but an increase in carry in stock rolled through to slightly higher carry out. The Canadian crop was also left unchanged, the USDA deciding to ignore some of the dire predictions across the Prairies after the heatwave. Interestingly Ukraine production was increased from 19.5mt to 21.6mt, up 2.1mt, good luck ground proofing that estimate. Brazil was left unchanged at 9.5mt, combining the sowing issues and then the frosts I can’t see Brazil making this target, but it’s in the pot for another month now.
South east Asian demand was increased 480kt, never a bad thing to see. The Indian numbers were left unchanged at 114mt and 8.5mt of carry out with imports of just 300kt. Kazakhstan production was increased from 14.5mt to 16mt. Like the Russian spring wheat region, Kazakhstan has seen nothing but rain since planting. The Russian and Kazak spring wheat crops should be good in volume if not in quality.
Corn traders found little to write home about in the WASDE, the market instead taking more of an interest in some good sales data, Chicago closes higher. Soybean traders ignored the sales talk and instead got into a round of technical selling. The pressure in Chicago soybeans spilled over to see weaker closes in both Winnipeg canola and Paris rapeseed futures.