USDA releases WASDE report

By: 
BRENNAN TURNER
President and CEO FarmLead

 

On Tuesday, December 12th, the USDA released its monthly WASDE report. The report in the 12th month of the year tends to be a bit of a time-waster. Honestly, this one wasn’t that much different. 

Case in point: it was the 45th straight December WASDE report that US corn yields went unchanged. US corn-for-ethanol raised by 50 million bushels whereas US corn exports were left unchanged at 1.925 Billion bushels.  This explains the 50 million bushel decline in US corn ending stocks, dropping from 2.487 billion bushels a month ago to 2.437 billion bushels in this month’s estimates. The average pre-report trade guesstimate was at 2.478 billion. 

Ultimately, we’ll take the 50 million bushel increase in US corn demand. There’s will still be nearly 2.5 billion bushels left in the pipeline by the end of 2017/18 though. It was a similar sentiment in South America as Brazilian corn production stayed at 95 million tonnes. In Argentina, the number kept at 42 million tonnes. Globally, corn ending stocks were raised to just over 204 million tonnes.

The market was expecting to see slightly stronger ​soybeans production in Brazil but slightly lower soybean numbers coming out of Argentina. However, the USDA kept Brazilian and Argentine soybean production numbers for the 2017/18 crop at 108 and 57 million tonnes respectively. Comparably, CONAB raised its estimate of the Brazilian crop to 109.5 million tonnes. It’s likely that it’s just too early for the USDA to account for some tougher weather conditions in South America. 

Globally, the USDA raised soybean ending stocks to a new record of 98.32 million tonnes. That’s up from the 97.9 million-tonne forecast a month ago and the below the average pre-report guesstimate of 97.82 million tonnes. 

The USDA says that global wheat production was increased by about 3.5 million tonnes, mainly attributed to the bigger spring wheat and durum wheat crop in Canada that was announced by Statistics Canada last week. Canada also saw wheat exports raised by 1 million tonnes, but the carryout in the Great White North should still be 6.64 million tonnes by the end of 2017/18, according to the USDA. European production was also raised by 1 million tonnes to sit at 152.5 million tonnes now. Both Russia and Ukraine saw wheat exports raised by 500,000 tonnes but Australian and Argentinian balance sheets were left unchanged. 

This means that total global wheat production was raised from the being the second-largest crop in history to the largest wheat crop in history at 755.2 million tonnes. The previous record was set last year with nearly 754 million tonnes harvested. What this all adds up to another new record carryout of 268.4 million tonnes. The last record was set last year at 255.3 million tonnes.

Overall, we continue to look for South American weather premium or fresh demand headlines to get us out of this bearish trading range we’ve been stuck in for the past few months. 

Brennan Turner hails from Foam Lake, Saskatcehwan, where his family started farming the land in the early 1900s. After graduating with an economics degree from Yale University, Brennan played professional hockey and worked as a Commodity Analyst on Wall Street before starting FarmLead.com. This past year, Brennan was named to FastCompany’s list of Most Creative People in Business while FarmLead was named by Forbes as one of the most innovative companies in agriculture.

 

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