No major changes are expected in the USDA’s upcoming monthly update to its Wasde report in terms of the wheat market, mainly because most of the outlooks for the 2021-2022 marketing year are largely resolved, while it is still too early for the 2022-2023 marketing year forecasts, according to analysts polled by Fastmarkets Agriculture.
In terms of the US, ending stocks are expected to remain steady compared to the previous USDA update – at 628 million bu (27.1 million tonnes) – while world ending stocks are also expected to stay unchanged, with industry sources estimating 280 million tonnes.
However, some industry sources expect US export perspectives to be pared back further amid a lack of demand and relatively high prices in a dynamic that would drive stock levels higher.
Globally, some small changes are expected to be delivered, but nothing big enough to significantly drive markets.
“I think wheat will see limited changes and… focus on corn and soy complex. Expect higher Argentina’s crop and exports higher – which could be offset by lower Russian and or EU exports,” Jeffrey McPike of McWheat Inc said.
“(The Australian) crop is still too low but that revision may take time. These and some other relatively minor changes are possible but I see nothing dramatic or very bullish in this report,” he continued.
Argentina’s wheat production is anticipated to be pushed higher to 21.8 million tonnes to reflect the local USDA office estimate that came out at the end of January, which brought it into line with the Buenos Aires Grains Exchange outlook.
Currently, the USDA is holding a 20.5 million tonnes outlook for Argentinian production and a 34 million tonnes outlook for Australia.
The Australian wheat crop could also be moved higher, as local market sources expect production to come in at 36-37 million tonnes, around 7% above the current USDA outlook.
However, the USDA may wait for signs of official, local confirmation from the Australian agriculture ministry, which is itself maintaining its production outlook at 34 million tonnes.
Little changes are expected for Russia, except a possible decline in the export estimate amid a high export tax rate, the upcoming quota capping exports, and the possible continuation of political tensions that are deterring end-users and slowing trade.
The USDA will release its February 2022 Wasde report at 1200 Eastern Time on February 9.
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