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JUNE USDA WASDE REPORT SUMMARY

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Not a report full of surprises on Friday night, more just in line with expectations. Wheat saw big increases in production, but nothing that we didn’t know beforehand. HRW wheat also got a boost of production. Beans and Corn ending stocks cut in the US, but as global figures were cut less than expected, no real change there.

Wheat            Neutral to Bearish – CBOT SRW JUL Down 15c

  • World production for 16/17 up nearly 4 million mt, comprising mostly of the US, EU and Russia.
  • World consumption up 3.4mmt, mainly India, the EU and the US.
  • World stocks to use ratio down slightly to 36%

Barley                        Neutral to Bearish

  • World production up 3.1 million mt, mostly EU and Ukraine
  • World demand up 2.7mmt, mostly EU, Saudi Arabia and Iran
  • World stocks up .6mmt
  • World stocks to use ratio up slightly to 16.41%

Corn               Neutral to Bearish – CBOT Corn JUL Down 3c

  • World production up 0.7 million mt – All Mexico
  • US ending stocks below traders estimates
  • World demand up 1.2mmt – mostly US
  • World stocks down 2 million mt
  • World stocks-to-use ratio down to 20.25%

Soybeans        Neutral to Bullish – CBOT Soybeans JUL Up 1c

  • World production down 0.5mmt
  • World demand up 0.6mmt
  • World stocks down 2mmt
  • Stocks to use ratio down a considerable 72 points to 23.12%

Nic Sewell

Markets Find Support

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Last week we saw the latest report from the USDA on global supply and demand. It focused on production and stocks as well as demand for grain and exports globally. Grain markets on a whole probably reacted a little more positively to the report than was expected with wheat corn and soy all making positive moves following the report and backed up by more positive gains during the week. A stronger Australian dollar and a basis that weakened recently has offset local prices though.

Northern Hemisphere weather markets are now starting to come into play with the wheat dormancy period starting earlier due to warmer and drier weather, leaving US winter wheat susceptible to a late freeze. Dry areas throughout the US may come under pressure and this threat along with damaging rain and hail recently in India’s Northern wheat growing areas have since aided the market. A quick snapshot of the latest USDA WASDE report as is most relevant to us here in Aus.

Wheat; a continuation of the recent bearish themes with an increase to stocks. Increases to the production forecast were made for Europe, China and the Black Sea, decreased in Brazil while notably a change to Aussie production decreased to 24.5mmt, finally. The market saw a decrease in US planted acres as a positive and was the main driver of Chicago markets in a US centric view on trading directly following the report.

Barley; again the report was not supportive of barley with supply up mainly in China and Russia. Global supply was increased 0.6mmt up from 145.16mmt to 145.83mmt. Demand was up by roughly the same figure. Stocks were increased from 23.6mmt to 24.2mmt.

Corn; bucked the trend and was slightly bullish. Chinese, Russian and US production was down by a combined 2mmt but the biggest drop came out of South Africa of 4mmt where the country has been gripped by drought. The market was most surprised by the cut to US corn yields however. Global supply decreased by 6mmt from 973.87mmt to 967.9mmt. Global demand was also decreased tempering the reports decrease to supply down 4mmt from 970mmt to 966mmt. Global stocks were decreased by close to 3mmt.

Soybeans; Beans were bullish with both greater consumption and forecast lower production. The reduction of US hectares was seen as key to reducing production overall by 1.4mmt. Global supply decreasing 1.1mmt overall, decreases to the US offset somewhat by increases to China production. Demand was increased by a healthy 1.85mmt form 270.86mmt to 272.7mmt.Stocks were decreased by 3.3mmt overall.

Tom Wake

USDA raises global production again

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Wheat rallied last week posting solid gains from start the week. Heavy deliveries and a strong dollar pressured while technical buying helped wheat recover losses from last week. CBOT Wheat March 16 futures rallied 4% and finished the week 495.40 USc/bu. Up 16.8 USc/bu week on week.

The US winter wheat conditions have remained steady at 55% good to excellent following recent moisture events, and this should allow for the winter wheat to move into dormancy in very good shape.

The USDA Supply and Demand Estimates report released on Thursday saw minimal changes to the US wheat balance sheet. However Global wheat stocks forecasts were raised higher by 2.3 million tons. World wheat production remains at a record high and is raised 1.9 million tonnes to 734.9 million. The upward revision from the November report follows increased production estimates for Canada up 1.6 million tonnes to 27.6 million and the EU.

The USDA reports Australian wheat production will still be at 26 million tonnes, while ABARES recently reduced our production by 1.3 million to 23.96 million tonnes. ABARE also reduced their estimate of Australia’s 2015/16 wheat exports to 16.95 million tonnes from 17.53 million tonnes. (16.6 million In 2014/15).

Brazil’s wheat crop has been lowered again to 5.2 million tonnes down from the 6.2 million tonnes last month. Increasing the potential for wheat imports from the US during 2016.

India’s wheat crop plantings are raising concern with only 200,000 hectares planted vs 242,000 last year, as high temperatures delay plantings, however India still have ample stocks to cover any short/medium term requirements.

USDA Report

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USDA Report

15th September 2015

WHEAT

The USDA report released on Friday 11th September (US time) had some bearish news for wheat with both global ending stocks and global wheat production up by 5 million metric tonnes (mt). Canada, Argentina and India all had decreased wheat supplies however this was not enough to counter supply increases from Europe, Russia and the Black Sea.

Global wheat consumption was the shining light, up by 1.6 million mt due in part to increased feed use from Russia, the EU and the Philippines.

BARLEY/CORN

A bullish outlook for corn unfolded on the back of a global production cut of 7 million mt and ending stocks down 5.4 million mt.

US Corn yields down by 20% compared to last year.

Chinese corn production down by 3 million mt to 229 million mt.

CANOLA/BEANS

Global bean stocks were down by around 2 million mt from last month’s report, the estimate now stands at 527 million mt.

Canadian canola producers are battling cold and wet start to their harvest, the weather interrupted start has the potential to effect production and/or quality in the area.

MONDAY 14th September;

CBOT Wheat Dec 15 – 485c/bu (+7)

CBOT Corn Dec 15 – 387c/bu (+12.8)

CBOT Beans Nov 15 – 872.4c/bu (+.2)

ICE Canola Nov 15 – $469.8 Canadian (+2.9)

Australian dollar against US Dollar- $0.7101

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