Revised figures in China shake grain market

Global wheat stocks are expected to increase by 7 million tonnes, causing wheat prices on the CBoT in Chicago to fall to $8 per ton on Thursday, November 186. The increase was caused by the fact that the stock in China was revised and increased from 260 million to more than 266 million tons.

It should be noted that the export of American wheat was also larger than expected. On the other hand, this is still 2,5 million tons behind last year.

Flattering figure
Global wheat production for the 2018/2019 season has increased by 2,6 million tonnes. It is striking that this contradicts all figures, which is why the figure is described as flattering. If the figures from China are not included, production would be adjusted downwards by 2 million tons. This has to do with the fact that production figures for Australia and Ukraine have been reduced again.

Drought still has a major impact in Australia. Wheat exports from the country will be at their lowest level since 2007, the USDA expects. It is expected that approximately 11,5 million tons will be exported, considerably less than what is usually exported (20 million tons).

Rally dampened by Chinese supplies
The listing for corn (CBoT) showed an increase on Thursday, November 8, following the WASDE report. This is because it has become apparent that stocks in the United States are smaller than expected. However, the rally was tempered by a sharp upward revision of corn stocks in China.

In China this concerns the so-called 'government stocks'. This is corn that was stored in the wet year 2015 and is not intended for export, which has to do with the quality. The country wants to use this corn for the production of ethanol. This correction caused the USDA to increase global corn supplies.

This means that the global corn harvest for the 2018/2019 season is estimated higher. However, expectations for the European corn harvest have been adjusted downwards, partly due to lower yields in Hungary, Poland and Germany.

Soy exports are disappointing
In addition, the WASDE report has shown that soy stocks in the United States are higher than expected, which is mainly due to the disappointing export figures. Exports are currently 9,6 million tons behind last year, partly due to the trade war with China. Global soy stocks have also been increased by 2 million tons.

The WASDE report shows that there are sufficient reasons to lower the listing of soy on the CBoT in Chicago. The rally, which continues a tweet by American President Donald Trump has therefore been somewhat tempered.

Finally, the report also discusses Brazil and Argentina. In Brazil, the soybean harvest is estimated at 120,5 million tons, compared to around 2018 million tons in 119. The Argentine soybean harvest is expected to reach 55,5 million tons. The figures therefore show significant growth, considering the 2018 harvest still amounted to 37,8 million tons.