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Special issue – WASDE, April 2022


Today’s special market report is dedicated to WASDE (World Agricultural Supply and Demand Estimates), a market report of the United States Department of Agriculture. Below you can find information on global production, consumption and stocks for the following crops:

PRODUCTION: WASDE has generated a somewhat stationary global production projection. The month-on-month level changed by only 0.33 million tons due to stock revaluations. It is an insignificant decrease. We therefore have marginal changes from 778.5 million tons to 778.83 million tons. Argentina is re-valued at an increase of 0.5 million tons, and some countries are adding another 0.3 million tons. In contrast, the EU also generates a decrease of 0.6 million tons from revaluations.

CONSUMPTION: WASDE generated a projected increase in consumption of 3.78 million tons, from 787.3 million to 791.08 million tons. This increase is due to the need for supply in the Middle East and North Africa, but the increase in consumption in India has a greater impact.

STOCKS: WASDE generates a level of stocks lower than last month by 3.08 million tons, starting from a level of stocks of 281.5 million tons and reaching 278.42 million tons. Stocks are closely linked to global trade and production. We saw the production, so we focus on trade. We record a decline in global trade, estimated to decrease by 3 million tons, to the level of 200.1 million tons. The decline in global trade is due to the implications of the war in Ukraine and the impossibility of exporting it to Ukraine. In statistical terms, we have the lowest level of wheat in terms of stocks in the last five years.

+0.33 | +3.78 | -3.08
  • The largest share in the growth of global consumption comes from India, aggregated with the normal consumption demand for this time from the Middle East and North Africa.
  • Stocks are at their lowest level in five years and we recall that ½ of these stocks are in China.
  • Clearly, higher consumption and a much lower level of stocks are pushing up wheat prices.

PRODUCTION: WASDE indicates an increase in global production from 1,206.1 million tons to 1,210.45 million tons. Basically, we are talking about an increase of 4.35 million tons. The main increase comes from Brazil, which is forecast with an increase of 2 million tons, from 114 to 116 million tons of total production (Safra + Safrinha). Another 0.7 million tons come from the re-evaluation of the production of the European Union, mainly from marginal increases of some countries such as Romania and Germany.

CONSUMPTION: WASDE indicates an increase in consumption of 0.55 million tons, starting at a level of 1196.6 million tons and reaching a level of 1197.15 million tons. It is not a significant increase that could impact the market in terms of price, but rather increased marginal consumption.

STOCKS: WASDE generates a rising stock level of around 4.46 million tons, largely due to declining corn imports from China, declining Paraguay exports and, subsequently, rising Serbian exports. On the other hand, stopping exports from Ukraine has a strong impact and thus increases stocks globally.

+4.35 | +0.55 | +4.46
  • We have a report that generates global production growth, mainly due to the upgrade in Brazil.
  • Consumption remains somewhat dormant with marginal growth.
  • Stocks are rising mainly due to the cessation of Ukrainian exports and the reduction in Chinese consumption (3 million tons). 

PRODUCTION: WASDE generates a decrease in soybean production again compared to last month, from the level of 353.8 to the level of 350.72 million tons, i.e., a minus of 3.08 million tons. The declines are as we all expected in South America, with Brazil once again downgraded by 2 million tons to 125 million tons and Paraguay by 1.1 million tons.

CONSUMPTION: WASDE indicates a decrease in global consumption of 1.82 million tons. Again, consumption is affected by China, which reduces imports by 3 million tons. The main cause is, of course, the reduction of the crush that has no yield in price, to which is added the lockdown in Shanghai.

STOCKS: WASDE indicates a decrease in global stocks of 0.42 million tons, starting at a level of 90 million tons and reaching 89.58 million tons. Broadly speaking, it is a marginal decrease generated by the trade-off between production and consumption. However, the US continues to generate good sales as exports.

-3.08 | -1.82 | -0.42
  • Soybeans suffer from predictable degradation due to weather conditions in South America. La Nina once again takes her share of the South American crops.
  • 10 million tons is a lot, but the US is trying to compensate and everything has to do with China’s claims that they are reducing imports by 30 million tons?!?!.
  • Global trade is also suffering, but the largest share will go to the VEGOIL complex, where soy is a participant.
  • A 100% bullish report for soy, but traders have known this for a long time.

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