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.
The WASDE special report generated by AGRI Column is only an interpretation of the figures reported by the USDA, respecting exactly the data, without intervening on them. Our views can be found in the weekly market report.
Below you can find information on global production, consumption and stocks for the following crops:
WASDE generated an upward projection for global wheat production from 771.64 million tons in the previous report to 779.6 million tons. We therefore have a global increase of 7.96 million tons of wheat production. The most important increases can be found in the account of Russia, which has increased its production level by 6.5 million tons, up to the level of 88 million tons, excluding Crimea. The previous month, Russia was quoted at 81.5 million tons. Australia is also a leader in production increases, registering an increase of 3 million tons to 33 million tons, compared to 30 million tons the previous month. China is another beneficiary of an increase in production by 3 million tons, from 135 million to 138 million tons. Canada benefits from an increase of 1 million tons to the level of 35 million tons. Among the areas that had decreases in production levels, we list the European Union, which decreases by 2 million tons, highlighting here Hungary, Romania and Spain. Also in the chapter of decreases, we highlight that the USDA takes into account a decrease of 3 million tons in India, reducing the projection of this country to the level of 103 million tons.
WASDE generated a consumption projection of 788.6 million tons, up by 4.38 million tons. The consumption projection increases due to the intensification of feed and residue consumption in Russia and Australia.
Global trade increases from 205.5 million tons to 208.6 million tons, representing an increase of 3.1 million tons. The increase in the level of trade volume is supported by Russia, Ukraine, Australia, Canada and the USA, which thus offset the lower export levels of the European Union and Argentina. Russian export is calculated by the USDA at a value of 42 million tons.
WASDE generates a slightly lower stock level compared to the previous month. From a level of 267.52 million tons, stocks decrease by 0.18 million tons, to the level of 267.34 million tons. Stocks fall by this level, minor we might say, and remain at the lowest level of the last six years.
WASDE AUGUST 2022
PRODUCTION – CONSUMPTION – STOCKS
+7.96 | +4.38 | -0.18
WASDE projects a decline in global corn production for June. This drop is a particularly important one because it comes from 2 different continents and we now factor in a compensation factor. Starting from an estimate of 1,185.9 million tons the previous month, we have a global production level of 1,179.61 million tons this month, down 6.29 million tons. The main geographic area that generated declines is the EUROPEAN UNION, which is degraded by 8 million tons, to the level of 60 million tons, amid excessive heat and drought. The US is also down by 3.7 million tons to 364.7 million tons due to a fall in productivity per hectare from 11.1 to 11 tons. Serbia is also down in the volume projection by 1 million tons to 6.2 million tons. In terms of compensating factors, we indicate Ukraine, with an added volume of 5 million tons, i.e. 20% as a positive difference compared to last month, when it was observed with a potential of 25 million tons. This month, Ukraine reached 30 million tons thanks to the 5 million ton volume upgrade. We also see a marginal recovery in Russia, with 0.5 million tons, from 14.5 million tons the previous month to 15 million tons.
WASDE indicates a marginal decrease in global consumption by 0.43 million tons. Starting from 1,185.2 million tons last month, we now have a forecast consumption level of 1,184.77 million tons. Consumption decreases marginally due to a potential replacement of maize with feed wheat. Global trade is growing in Ukraine, Serbia, Russia and Zambia, but falling in the EU and the US amid lower production volume forecasts.
WASDE projects a stock level down 6.22 mil. tons from the July 2022 projection of 312.90 mil. tons and falling to 306.68 mil. tons. Of the 6.22 million tons shortfall in global stocks, the US is responsible for 2 million tons of the shortfall in domestic stocks. But the corn harvest is very close, so the lower level of stocks will generate very little pressure on the global price.
WASDE AUGUST 2022
PRODUCTION – CONSUMPTION – STOCKS
-6.29 | -0.43 | -6.22
WASDE reports soybean production rising by 1.39 million tons, from 391.4 million tons in July to 392.79 million tons in August. We have growth in the US from the re-evaluation of productivity per hectare of 0.7 million tons, as well as growth in China of about 0.87 million tons.
WASDE indicates consumption forecast to increase by 0.55 million tons, driven by increased processing capacity in Brazil. Global trade saw an increase of 0.54 million tons in the US to 58.65 million tons, but was down in Argentina by 0.4 million tons to 4, 3 million tons.
WASDE shows stocks up 1.81 mil. tons from last month, a direct result of higher production from the US and China and lower Chinese import levels amid lower scrap consumption due to cuts in the herds of pigs. China estimates only 91 million tons of import level, compared to 99 million tons at the beginning of the season.