Global wheat stocks sharply revised upwards

The May wheat contract on the Matif closed €2,25 lower yesterday at €195,50 per ton. On the CBoT, wheat lost 5 cents to $5.74 per bushel. Maize also took a step back, falling 3 cents to $4.44 per bushel. Soybeans closed in the green, gaining 3 cents to $11.65 per bushel.

The WASDE report published yesterday evening, Dutch time, by the USDA contained no particularly shocking changes. Perhaps the most striking change is the increase in global ending wheat stocks for the 2025/26 season by 6,2 million tonnes to 283,1 million tonnes. This makes the ending stock 24 million tonnes, or 9%, larger than the previous season. Global wheat production for 2025/26 has been increased by 2 million tonnes to 844,2 million tonnes. This adjustment is primarily due to higher wheat production in the EU and Russia. Consumption has decreased by 4,7 million tonnes to 820,1 million tonnes. Here, the adjustment is largely attributable to India. Data from the Indian government shows that stocks in that country are larger, and according to the USDA, this implies that less wheat was consumed on the subcontinent.

The global ending stock of corn for the 2025/26 season has been increased by 2 million tonnes to 294,8 million tonnes. This is largely in line with what traders were expecting in the Reuters poll earlier this week. The USDA has made no adjustments to the South American corn harvest this month. However, the harvest estimate for South Africa has been raised by 800.000 tonnes to 17,3 million tonnes. For soybeans, the WASDE report is neutral to slightly bullish of tone. Global ending stocks have been reduced by 500.000 tonnes to 124,8 million tonnes. The harvest estimates for Brazil and Argentina have remained unchanged. Somewhat notable is that the USDA has made no adjustments for the consumption of soybean oil in biofuel. The first figures for the 2026/27 season will appear in the May edition of the WASDE report.

Record harvest in Argentina
The Rosario grain exchange has significantly revised its corn harvest forecast for Argentina upwards from 62 million tonnes to 67 million tonnes. If this yield is actually achieved, it would be a substantial improvement on the record. Argentina's best harvest to date was 52,5 million tonnes in the 2023/24 season. According to the exchange, the reason the harvest is so much larger than the previous estimate is because Argentine farmers have sown many more hectares than previously expected. The acreage is 420.000 hectares larger, bringing the total to 10,2 million hectares.

The increased maize acreage comes at a significant expense of soybeans. The soybean acreage ends up 200.000 hectares lower at 16,2 million hectares. Remarkably, the Rosario stock exchange is keeping the yield forecast for soybeans unchanged compared to the previous estimate, at 48 million tons.

Unclear agreements
Meanwhile, the unrest in the Middle East continues to set the tone, particularly on the oil market. The ceasefire between Iran, the US, and Israel is fragile, and the countries are squabbling over exactly what has been agreed upon. In any case, the Strait of Hormuz has not been fully opened. Various sources report that Iran is allowing only fifteen ships through per day. Before the war, that number was well over one hundred. Furthermore, access is reportedly being granted only to ships from friendly countries. Ships with links to Israel and the US are not allowed through.

We all notice the limited access to oil from countries in the Persian Gulf at the pump. The region also produces a large amount of fertilizer, which has become significantly more expensive due to the war. India, which imports large quantities of fertilizer from the Middle East, has announced measures to protect farmers against the high prices. The country has set up a subsidy program to keep fertilizer affordable for farmers. It has established maximum selling prices for various fertilizers. The program involves 415 billion Indian rupees (approximately €3,83 billion).

Drought spreads in the US
In the US, rain is forecast for the prairies this coming weekend. Naturally, this is not yet reflected in this week's drought monitor. The winter wheat acreage located in drought zones has increased by 3% compared to last week. In total, 68% of the winter wheat is now located in drought zones. Little rain is forecast in the southeastern US, which is favorable for planting crops such as corn and cotton in the area.