Lower grain stocks due to drought in South America

For wheat, the USDA adjusts consumption and exports downwards and ending stocks upwards, compared to the December version of the Wasde report. Production is estimated at the same time. A larger wheat harvest is forecast for the EU and Argentina, but this is offset by lower yields in Brazil and Paraguay. The use of wheat is estimated to be lower because there is less demand from the feed industry in the US, the EU and Ukraine. That's because wheat is priced relatively high compared to other feed grains, the report says. The final wheat stock for the 2021/2022 season is estimated at 280 million tons. that is 1,8 million tons more than in the December version, but it is still the smallest wheat stock since 2016/2017. The price on the CBoT fell after the report was published, but analysts say the tight supply is creating a degree of confidence among traders.

South America
For corn, the USDA has reduced yields, consumption and ending stocks. Due to drought, expected yields of early maize in South America in particular are lower. The total yield of maize and feed grain is 1,6 million tons lower and amounts to 1.500,1 million tons. Less corn is exported in the US, but that difference is made up by additional demand from the ethanol industry. The adjustments in oilseeds are also mainly due to the drought in South America. The Brazilian harvest is 5 million tons lower, which amounts to 139 million tons. For Argentina, the USDA estimates the yield at 46,5 million tons, which is 3 million tons less than in December. In percentage terms, the biggest change is in Paraguay, where the yield has gone from 10 million tons to 8,5 million tons. The final stock this season amounts to 95,2 million tons, a reduction of 6,8 million tons compared to December.