The March Wasde report is usually not the most exciting of the year. This time it is different with major adjustments from the USDA. For wheat, the stock has been adjusted upwards, while the ending stocks of corn and soybeans have been adjusted downwards. The trade restrictions hanging over the market have not been included in the Wasde report. However, that does not mean that the market is not paying attention to them.
The May wheat contract on the Matif closed yesterday €2,50 lower at €221,25 per tonne. Grains also took a step back on the CBoT. Wheat closed 0,8% lower at $5.41 per bushel. Corn lost 0,5% to close at $4.56½ per bushel. Soybeans moved more sideways with a minus of 0,2%. With that, soybeans closed at $9.97¾ per bushel.
The USDA surprised the market with the March edition of the Wasde report. The USDA gives a particularly good report for the American market. bearish signal off for wheat. US ending wheat stocks for 2024/25 season are estimated at 819 million bushels compared to 794 million bushels in the February report. Traders had been expecting the USDA to keep ending wheat stocks about the same.
The Australian wheat crop estimate has been raised by 2,1 million tonnes to 34,1 million tonnes, the third-largest wheat crop ever for the country. Combined with larger opening stocks in Turkey and better-than-expected harvests in Argentina and Ukraine, the total amount of wheat available this season is estimated to be 5,4 million tonnes higher at 1.066,7 million tonnes. Wheat consumption has been raised by 2,9 million tonnes to 806,7 million tonnes, which is higher than the harvest of 797,2 million tonnes. The amount of wheat traded on the world market has been reduced by 0,9 million tonnes to 208,1 million tonnes. The world end stock of wheat for the 2024/25 season has been increased by 2,5 million tonnes to 260,1 million tonnes compared to February.
Less corn and soy
For corn and soy, the Wasde report is more neutral or even slightly bullish of tone according to analysts. The world ending stock of corn has been reduced by 1,4 million tons to 288,9 million tons. Corn production in Argentina and Brazil remains unchanged at 50 and 126 million tons respectively. However, the USDA expects Brazil to export 2 million less corn. Because more corn is used for the production of biofuel, Brazilian exports will amount to 44 million tons according to the USDA. The world ending stock of soy has been reduced by 3 million tons to 121,4 million tons. As with corn, no change in the harvest forecasts for Argentina and Brazil here either. The Argentine harvest is estimated at 49 million tons and the Brazilian at 169 million tons.
The Wasde report does not take into account the import tariffs that Trump wants to impose on April 2. "The Wasde report only takes into account trade policies that are in effect at the time of publication," the report reads. Until the tariffs are actually in effect, the USDA does not include them in the Wasde report.
trade war
The looming trade tariffs are not going unnoticed by the market, however. Trump admits that import restrictions could be at the expense of economic growth. That caused a sharp drop on the stock exchanges yesterday. The commodity markets are also feeling the pinch. The fear is mainly about the reaction of other countries to the American import tariffs.
The European grain market is suffering from a relatively strong euro. The European currency has risen to a four-month high against the dollar. That makes European wheat relatively expensive on the world market and that does not help confidence on the futures market in Paris.