Worldwide stocks of wheat are set to set a new record and are higher than expected. As expected, soybean and maize stocks are lower. These are the main conclusions from the WASDE report. What does this do to global grain prices?
The report mainly affected the soybean market. The market is 'bullish' because soybean production is 6 million tons lower than forecast in the March report (-15%).
Production is disappointing
This is mainly due to the fact that production in Argentina is 7 million tons lower. This is due to drought in the country. This means that revenues are at their lowest level in 9 years. The lower yields in Argentina are partly offset by higher production in Brazil.
When global soybean production is compared with last year, it becomes even clearer why prices are rising. Production was 1 million tons higher one year ago. The global demand for soybeans has also risen sharply (+10 million tons). This comes at an unfortunate time, because the tensions between China and the United States.
What is indicative of Argentina is that the country has made the largest purchase of soybeans since 1997. The country bought 120.000 tons of soybeans from American exporters.
Wheat and corn supplies
As for the wheat and corn markets, the report had less impact. According to the USDA, global wheat stocks are at 271 million tons, a record and slightly more than the 268 million tons expected last month. Corn stocks have been reduced by 2 million tons to 197 million tons. The extreme drought in Brazil and Argentina was also to blame for this.