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 published earlier.
Below you can find information on global production, consumption and stocks for the following crops:
WASDE generated a global downward projection of 1.79 million tons, from 773.43 million tons to 771.64 million tons. The decrease in the global production projection is distributed between the European Union (Spain, Italy and Germany), Ukraine and Argentina. As we well know from previous reports, Argentina will not sow the number of hectares allocated to wheat due to water shortages. Thus, the projection in the European Union decreases by 2 million tons, to the level of 134.1 million tons, Ukraine is reduced by 2 million tons, up to 19.5 million tons, and Argentina is currently losing a potential of 100,000 hectares that will not be sown. The growth is distributed between the USA, Canada and partly Russia. Canada receives a crop upgrade of 1 million tons, up to the level of 34 million tons. The US also receives about 1 million tons, and Russia only 0.5 million tons.
WASDE generated a consumption projection of 784.22 million tons, down 1.77 million tons. Estimates take into account lower consumption in Ukraine and the European Union, due to lower feed and residual consumption.
Global trade increased by 0.9 million tons to 205.5 million tons. The direct beneficiaries of this increase in exports are the USA and Canada, which are, however, offset by declining exports from the European Union and Argentina.
WASDE generates an increasing level of stocks compared to the previous month. From a level of 266.85 million tons, stocks increase by 0.67 million tons, to the level of 267.52 million tons. Stocks are growing at this minor level, we could say, due to the reduction of aggregate consumption in different origins. But even with this higher level of stocks globally, the figures indicate the lowest level from 2016-2017 to date.
WASDE JULY 2022
PRODUCTION – CONSUMPTION – STOCKS
-1.79 | -1.77 | +0.67
WASDE is generating an increase in global corn production for June. But this increase is totally insignificant, we could say. The figure of 90,000 tons is one that does not influence at all the values of last month, when we had a value expressed in figures of global production of 1,185.81, and this month we have 1,185.9 million tons. But in terms of increases and decreases, we have differences globally. Thus, US corn production is increased by 1.1 million tons, according to the NASS report of June 30, 2022, which allocated a larger area to the maize crop than the intentions expressed on March 1, 2022. Paraguay also increases the production of maize. A marginal increase is indicated in Kenya also. At the same time, Russia lost 1 million tons by reducing the area allocated to corn, and the European Union lost about 200,000 tons.
WASDE indicates a decrease in global consumption by 1.08 million tons. Starting from 1,186.28 million tons last month, we now have a forecasted consumption level of 1,185.2 million tons. This decrease is generated by a lower level of feed and industrial use globally, without areas where this decrease is pronounced. Exports are balanced. Russia falls in the export forecast by 0.5 million tons, while the export forecast increases in Paraguay.
WASDE generates a growing level of stocks. The figure of 2.45 million tons added to the stocks starting from a level of 310.45 million tons the previous month and reaching 312.9 million tons is a determining factor in the depreciation of the corn price. Sub-summation of lower consumption with increasing production allocated to the US and Paraguay leads to this rising result in stocks.
WASDE JULY 2022
PRODUCTION – CONSUMPTION – STOCKS
+0.09 | -1.08 | +2.45
WASDE generates a decrease in soybean production by 3.97 million tons. This decrease is generated by the USA, which, through the NASS report, indicated a decreasing area allocated to soybean cultivation, while maintaining productivity per hectare. Canada is also contributing to this decline in production forecast. Thus, the USA decreases in the volume projection by 3.7 million tons, and Canada by 0.3 million tons.
WASDE indicates a somewhat stable consumption forecast, judging by the figures. We observe a decrease from 377.86 million tons to 377.7 million tons. So we have a decrease of only 160,000 tons globally from the reduction of US processing, amid declining export demand. This effect of the export reduction applies to all North and South American origins alike, amid lower demand from China.
WASDE indicates a low level of stocks compared to last month when we had 100.46 million tons. Global soybean stocks fell to 99.6 million tons, a month-on-month decrease of 0.86 million tons. However, a declining production partially offset by the reduction in exports (thus an increase in stocks) generates this decrease at the level of July 2022.