The September WASDE report surprises as there is talk of increased global wheat production. For example, the yield in Russia has increased by 3 million tons, compared to the August report. In addition, there are also new figures on maize and soy yields.
The report from the USDA (the American Department of Agriculture) is particularly surprising because the wheat harvest in Russia is rated higher. The USDA expects the harvest to reach 72,5 million tons. However, production for the rest of Europe will not be reduced further.
On the other hand, a number of yield reductions have been observed. For example, this has been reduced by 1 million tons for Canada and by 2 million tons in Australia. However, this is not too bad, because the expectation was that yields would be even lower.
Increase in closing stocks
In addition, production in India is expected to increase by 2,7 million tons to a record of almost 100 million tons. Closing stocks of wheat also increased by 2 million tons, bringing them to more than 261 million tons. The fact that closing stocks are not increasing faster is mainly because consumption is increasing (+2,3 million tons). The closing stock of 261 million tons is 5% lower than last year's record stock.
Wheat prices in the United States (US) recently fell (following the report) by $4 to $177 per tonne. The Matif in Paris showed a small recovery on Wednesday September 12 and rose towards €202 per tonne. However, this quote also opened lower again on the morning of Thursday, September 13.
More corn and soya
In addition, corn and soy yields were also estimated to be higher. The harvest in the US in particular seems to be very good, as far as corn and soy are concerned. Corn at the CBoT in Chicago plummeted from $140 per tonne to $134,50 per tonne after the confirmation of the record harvest.
Despite the good soy yields in the US, which is expected to bring the total yield to 127,7 million tons, the price fell. This was partly due to the news that the US has proposed new import duties on products from China.