The United States Department of Agriculture (USDA) has revised forecasts for wheat, corn and soybean yields upwards. For wheat and maize, even top harvests are expected, provided the growing season is normal. Not only are the yield expectations good, the expected prices are also well above the multi-year average.
The seasonal average for corn is estimated at $5,70 per bushel ($224 per ton), wheat at $6,50 per bushel ($239 per ton) and soy at $13,85 per bushel ($509 per ton). These are the highest prices for corn and soy since 2013 and for wheat the highest prices since 2014.
The USDA published the latest WASDE report on Wednesday, May 12. After publication, prices on the Chicago stock exchange (CBoT) fell slightly. The report is less bullish than many analysts and traders expected.
Good prospects for wheat
Global wheat production is estimated by the USDA at 789 million tons. That is 8,1 million tons more than in the April report. Good yields are expected in Argentina, the EU, the UK, Morocco, Ukraine and the US. In Russia, a yield is expected that is approximately the same as last year, when the country harvested a record harvest. Australia and Canada are experiencing drought and lower yields are therefore expected there than last season.
Wheat consumption has also increased from market year 2021/2022 by 7,8 million tonnes. The total use is therefore estimated at 788,7 million tons. As a result, closing stocks will only increase to a limited extent. China continues to hold the largest wheat stocks at 295 million tons. The country therefore has 48% of the total.
Large harvest and high consumption
Grain corn is heading for record yields, according to USDA analysts. Consumption is also higher than ever before. It increases by 3% according to the USDA. The world supply is expected to increase by 3% in the 2021/2022 season.
Brazil remains the largest soy exporter in the 2021/2022 season. According to the USDA, the country then accounts for 54% of global soy exports. In 2020/2021, Brazil accounted for 50% of total soy exports. China will import an additional 2021 million tons of soy in the 2022/3 season, amounting to 103 million tons. The world stock amounts to 91,1 million tons. That is 4,6 million more than in the April report.