USDA Revises Global Wheat Stocks Upwards

GLOBAL - Yesterday's USDA report (11 December) has increased the forecast of global wheat stocks by 2.8Mt and they are now set to be 176.95Mt at the end of the 2012/13 season.
calendar icon 13 December 2012
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The estimate is above many analysts’ expectations, according to the latest Reuters poll.

The increase to stocks follows higher production and lower demand forecasts. Production was increased by 3.7Mt to 655Mt, mainly on the back of higher Chinese production, with increases also for Australia and Canada. These more than offset smaller EU and Brazilian crops. Total world use is forecast down by 1.2Mt to 674Mt (698Mt 2011/12). The latest estimate of ending stocks equates to 26.3 per cent of annual consumption, a sizeable increase from 25.8 per cent last month.

This report also saw few alterations to the South American maize and soyabean crop estimates and tighter US soyabean stocks.

Ahead of the report much of the industry’s focus was on the South American maize and soyabean crops where planting is underway. With rain continuing to disrupt planting in Argentina, there is growing confidence that some land intended for maize will shift to the later planted soyabeans.

Helen Plant, AHDB /HGCA Analyst said: “The latest report from the USDA now forecasts the Argentine maize crop at 27.5Mt, a reduction of 0.5Mt compared to November’s report due to a smaller planted area.”

“While this would still be an increase of 6.5Mt from last season’s drought affected crop, the world is looking to South America to provide a boost to tight global feed grain supplies.”

The Brazilian maize crop estimate was left unchanged also from November at 70Mt. South American soyabean production numbers were left mainly unchanged including Brazil at 81Mt.

Globally, a larger Chinese crop was the main reason for a 9.4Mt increase to global maize production to 849Mt - now 33Mt below 2011/12 production. However, an increase of consumption (again mainly in China) leaves global end-season stock forecasts largely unchanged at 118Mt. Chinese import demand was also unchanged at 2Mt.

Tighter US soyabean stocks

Global soyabean production was slightly higher - up 0.12Mt from November to 268Mt. Canadian production was revised upwards, offsetting a downgrade in EU-27 and Paraguayan production; the Brazilian and Argentine crop forecasts were unchanged from last month. Global demand for soyabeans was also largely unchanged at 261Mt, with ending stocks slightly (0.1Mt) lower at 59.9Mt, but still up from last year’s 56.0Mt.

In the US, soyabean stocks continued to tighten following a small increase to the domestic crush figure. End-season stocks are now forecast at 3.5Mt, equivalent to just 4.3 per cent of annual domestic and export demand, down from 4.6 per cent in November and 5.4 per cent in 2011/12.

Further Reading

You can view the full report by clicking here.

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