In the latest Wasde report, which focuses on the old crop, the export and stock figures for soybeans and maize have finally been adjusted. That moves the market. The US Department of Agriculture expects a larger Brazilian corn crop. The wheat market is positive, with higher prices on the horizon.
There was no truly shocking data to be found in the Wasde report for April, which was published last Friday (April 9). It is important that the figures for corn and soy have been adjusted. The USDA now projects an ending inventory of 1,352 billion bushels of grain corn, up from 1,5 billion previously. This was also less than what analysts had expected, which gave the market an upward push.
Record corn exports
Consumption figures due to internal consumption in the US and exports are increasing. China in particular has purchased significantly more corn. The export of 2,675 billion bushels is a record. Globally, the USDA is also allowing corn stocks to decline, below the levels expected by analysts. This is mainly due to increased demand in the US.
Soy processing is loss-making
The figures for soy did not change much. The ending stock of soybeans in the US remained unchanged, while the market also expected a reduction here. The ministry did increase Brazilian bean production by 2 million tons. If the harvest of 136 million tons becomes reality, it will be a record. China's purchase of soy was reduced by an equal amount, because less of this raw material is processed in the country. The soy has simply become too expensive to process (crush) in a profitable way. Reduced Chinese demand and increased South American production result in a larger global ending stock, the USDA calculates.
As for wheat, the Wasde report is optimistic. Americans believe that wheat consumption is growing worldwide because it has become a cheaper grain than corn and also contains more protein. For this reason, China in particular is purchasing 5 million tons more wheat. For the sixth time in a row, the USDA is increasing Chinese wheat import figures. There is a strong demand for wheat worldwide. Closing stocks therefore decrease by 5,7 million tons compared to the previous estimate. Analysts expected unchanged figures, which also caused the wheat price to rise again. On Monday afternoon (April 12), wheat was trading lower again on the Matif.
Grain grows well
Cereal crops in Europe are in good shape on average. It is cold with a few degrees of night frost every now and then, but that does not cause any problems. The French market agency FranceAgriMer remains unchanged in its assessment of French wheat crops. In Russia the situation is still fluid. Rainfall has helped some crops, but frost in the center of the country actually causes a greater risk.
The weather is also closely monitored in the US. For example, it is extremely dry in the summer wheat areas (Dakotas), which makes growers hesitant to sow. A cold outbreak in much of the Midwest prevented early corn seeding. In addition, it is also dry here in many states.
Weather market
The grain market has thus become a real weather market. Reports about temperatures, precipitation and sowing progress will influence the prices in the coming months, which can therefore change abruptly. There is no problem in Europe. The differences are greater in North America and the situation in South America also plays an important role. The soy harvest has been completed, but now it is time to see how the offspring of grain maize develops. This is currently hampered by drought.