Agricultural Commodities - WASDE Outlook

IHS Markit Food and Agricultural Commodities Economics Vice President of Client Advisory, Peter Rohde, talks through our expectations for the upcoming October WASDE report, which is due to be released by USDA on October 12th.

• US Wheat: 2021/22 feed demand is coming down, after projections were elevated due to high corn prices, we expect USDA to make a 40 million bushel reduction to 120 million bushels. On top of that, the US export outlook has been below expectations so the US export number could possibility be reduced to near 825 million bushels.
• Global Wheat: All eyes have been on Russia this year with wheat production coming well off last year's record high with USDA calling for a 72.5 million ton crop. Outlook calls for yields a bit better than previously expected, and so we expect that to production number could be increased as the Canadian wheat crop production outlook continues to be ratcheted lower.
• Brazil's soybean and corn production potential in the 2021/22 marketing year are both expected to be record large offering the US competition for global demand.
• Global demand for corn, soybeans and wheat are all driven by China. China's corn imports jumped to 30 million tonnes in 2020/21, but our outlook for record corn production in China in 2021/22 could result in that demand taking a step back.
• US Corn: The September 1 stocks report surprised the marketplace by increasing 2020/21 carryout to 1.236 billion bushels. As we look at the 2021/22 corn planted area we continue to look at adjustments using FSA data that should show planted area increasing to 93.7 million acres, nearly 400,000 acres larger than USDA.
• US Soybeans: the marketplace was surprised to have USDA increase that size of the 2020 US crop, which many thought was final and know nine months ago. The US stocks jumped to 256 million bushels, which carried over to the 2021/22 US balance sheet. Our expectation is that the US stocks will push over 300 million bushel by the end of the 2022 marketing year, a figure that will bring the top end of price potential down $1.00 per bushel from our previous outlook.
• Overall we're looking at a high prices environment, but our price outlook is not a high as it was previously.

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Posted 08 October 2021 by Peter Rohde, Vice President, S&P Global Commodity Insights, Food and Agricultural Commodities Economics

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.