At a glance the February WASDE report isn’t bearish wheat but looking further into the data you tend to realise it’s not that bullish either. At a glance the 1.26mt reduction on world ending stocks looks promising. Drilling down a little into the data reveals that ending stocks from the major exporters was actually increased by 1.06mt. The reduction comes from a fall of over 2.5mt in major importer ending stocks, and a 2.5mt reduction in China’s ending stocks falling 2.5mt from 133.1mt to 130.6mt, not exactly an easy number to deny or confirm. The net result is still a world stocks to use ratio of 32%, a number the world is generally pretty comfortable with.

Looking at some of the major changes in wheat is still interesting though. The USDA reduced Russian exports 500kt to 45.5mt, still above many trade estimates, but that half a million tonnes of export reductions was added straight onto their carry out, and every other facet of their S&D table was left unchanged.
Tighter ending wheat stocks, from 170.1mt to 167.54mt, for the major importers could be viewed as bullish. The fall in ending stocks was determined by a 2.9mt reduction in imports and a small reduction in both production and carry in. The fact that these reductions came in as consumption reduction by the major importers was increased by 500kt, does make that side of the table more bullish than bearish.

A slight reduction in USA carry out is always a good thing for the US futures market. Also of interest was the fact that the USDA left US wheat exports unchanged at 23.13mt. Lately the exporters have been exceeding the trades expectations for US wheat exports, possibly suggesting there is some potential to increase projected US wheat exports in the March or April WASDE and reduce US carry out even further.