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USDA WASDE Summary 12/12/16

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The latest USDA Report for December was released on Friday, and globally the USDA Report was overwhelmingly bearish across all commodities. However, the US ending stocks of the key commodities were kept unchanged despite expectations that they might have increased, which combined with fund buying led to a jump in most futures. Globally, wheat jumped a solid 6.5 million mt of which 4.7 million mt was in Australia at 33 million mt. Corn production was up in several countries but lower than expected US stocks supported prices overnight. Beans were also up solidly on the production side but it was almost matched by a similar increase in demand.  Overall, the report was more of the same with big crops so the market will likely digest it pretty quickly.

WHEAT           BEARISH

  • World production UP 5 million mt – key changes:
    • Australia UP 7 million mt to 33 million mt.
    • China UP 85 million mt.
    • EU UP 4 million mt.
    • Brazil UP 36 million mt.
  • Consumption UP 2 million mt (mainly in Australia, Russia and China).
  • Stock levels UP 9 million mt and stocks to use ratio UP 24 points to 34.08%.

BARLEY           SLIGHTLY BEARISH

  • World production UP 7 million mt – most in Australia and Canada.
  • World demand UP 3 million mt.
  • World stocks UP 28 million mt with stocks to use ratio UP 16 points to 15.85%.

CORN              BEARISH

  • World production UP 2 million mt – with key changes:
    • China UP 55 million mt.
    • Brazil UP 3 million mt.
    • Russia UP 1 million mt.
    • Canada UP 7 million mt.
    • Indonesia UP 6 million mt.
    • EU UP42 million mt.
  • World demand UP 7 million mt – mainly in the China and Indonesia.
  • World stocks UP 4 million mt – mainly in China and Brazil.
  • World stocks-to-use ratio UP by a 30 points to 21.65%.

SOYBEANS      BEARISH

  • World production UP 9 million mt – most of it in India and Canada.
  • World demand UP 9 million mt.
  • World stocks UP by a massive 1.3 million mt (in Argentina and India).
  • World stocks-to-use ratio UP 27 points to 28.85%.

USDA Summary – October

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OCTOBER USDA WASDE REPORT SUMMARY

USDA report mainly bullish grains and bearish oilseeds. Wheat saw another month of support with less production, more consumption and less stocks, whilst the USDA lifted the Australian wheat production by 0.8 million MT from last month (we believe they are 2 million MT on the high side for AUS).  Barley continue to get tighter every month in these reports, and this month was no exception with production down, consumption up and stocks down.  Globally corn saw lower production in the US and a better Brazilian crop could not help that. Stocks of corn are down 2.6 million MT this month. Beans were the most bearish with record US yields and higher global production by 2.8 million MT. Ending stocks jumped 5.1 million MT.

WHEAT             BULLISH

  • World production DOWN 4 million mt.
  • Biggest changes
    • Australia unexpectedly UP8 million mt. This should definitely change once harvest gets going.
    • Canada UP 1 million mt.
    • EU DOWN 2 million mt.
    • US DOWN 3 million mt.
  • Consumption UP Close to 1 million MT (US consumption down close to 2 million MT)
  • Stock levels DOWN 7 million MT and stocks to use ratio down 5 point to 33.76%

BARLEY             BULLISH

  • World production DOWN close to 1 million MT (mainly in Russia and EU)
  • World demand UP close to 0.5 million MT
  • World stocks DOWN 5 million MT with stocks to use ratio down a solid 32 points to 15.61%

CORN                BULLISH

  • World production DOWN close to 1 million MT (mainly EU and US whilst Brazil actually up 1 million MT)
  • US yields now forecast at 173.4 bu/acre
  • World demand DOWN 5 million MT – mainly in the EU and “Other” countries
  • World stocks DOWN 6 million MT
  • World stocks-to-use ratio DOWN 31 points to 21.28% (and US ending stocks projected to be down as well)

SOYBEANS        BEARISH

  • World production UP 8 million MT – (US up 1.8 million MT and Brazil up 1 million MT)
  • US yields up to 51.4 bu/acre
  • World demand DOWN 5 million MT
  • World stocks UP by a massive 5.1 million MT (in Argentina, Brazil and China)
  • World stocks-to-use ratio UP 185 points to 27.06%

September USDA Summary

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The USDA report was mostly bearish with a few surprises. Wheat took a good chunk out of ending stocks again by reducing EU, India and China down solidly (and Australia up).  USDA left US wheat ending stocks unchanged. Corn saw global production and ending stocks down, and in particular we saw US corn yields down from the August estimate which took a good chunk out of US production – most of it expected though so market did not react much. Beans saw the biggest surprise with US yields up well more than most traders expected – and a resulting 3.8 MMt increase in US production.

WHEAT             BULLISH – CBOT SRW DEC UP 5.80 USc/bu

  • World production for 16/17 UP 4MMt. EU (2.2MMt) & China (2MMt) both DOWN. Kazak (1.5MMt), Russia (7MMt) Aus (1MMt) India (2MMt) all UP.
  • World consumption UP 1MMt (Mostly India & Morocco.)
  • World stocks-to-use ratio DOWN again to 33.81%. (Fourth downward revision in a row).

BARLEY             BULLISH

  • World production DOWN 5MMt (Mainly EU & Russia).
  • World demand UP 13MMt.
  • World stocks DOWN25MMt.
  • World stocks-to-use ratio DOWN 19 points to 15.92%

CORN              NEUTRAL to BULLISH – CBOT Corn DEC DOWN 1.60 USc/bu.

  • World production DOWN 7MMt (Mostly China, U.S & EU)
  • World demand DOWN5MMt (Mostly U.S & EU).
  • World stocks DOWN4MMT.
  • World stocks-to-use ratio DOWN 12 points to 21.59%.

SOYBEANS        BEARISH – CBOT Soybeans NOV DOWN 16 USc/bu.

  • World production UP12MMt (Majority US which is UP 3.8MMt).
  • World demand DOWN1MMt.
  • World stocks UP9MMt.
  • Stocks-to-use ratio UP 42 points to 25.20%.

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

Weekly Report 5/3/16

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BEANS/CANOLA

Chicago May-16 soybean prices increased 1% and settled at 863.6 US¢/bu on Friday, as the sharp rise in Brazilian Real hurts their export prospects, and also found support on the back of weather concerns in the US.

Chart 160305 WR1

Canola took a huge knock over the week with ICE Canola March 16 finishing at CA$452.3 up CA$4.5/t for the week.

Chart 160305 WR2

Although the international markets saw increases last week, there is still growing concerns that the South American crop could limit gains in the near term.

With the Brazilian Soybean harvest gathering momentum and 54% complete. Informa has increased the Brazilian soybean crop to 101.3 million mt up 800,000t from their previous estimate.

The Argentine soybean crop has benefited from the recent rainfall and the crop is now well into their flowering period and pod fill stages. Informa lowered the Argentine production by 1 million mt to 58 million mt.

COFCO estimate Chinese soybean imports could reach 83 million mt, due to improved margins on the pig production, This estimate is above the 80.5 million mt estimated by the USDA.

Chart 160305 WR3

To read the full report click the link below.

Weekly Report 16_03_04

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.

Weekly Report 30/10/15

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WHEAT

Wheat CBOT Dec 15 futures made positive gains for the week, and finished at

515USc/bu. up 24.4USc/bu week on week.

US wheat prices traded higher this week as better than expected export sales came amid forecasts for more rain in the winter wheat areas, and as fund participants sparked a round of buying.

The USDA has lowered Australia wheat crop estimate to 24 million tons

We continue to monitor the northern hemisphere crop progress, as the market is very sensitive to any developing production concerns.

The US winter wheat is currently at 83% planted up 7% from last week. The first condition rating was also released, the good/excellent score was 47%. This is the lowest rating in 3 years and well below analysts’ expectation for 55%.

Weather 151110

The extreme weather map shows that large areas of Italy and eastern Europe experienced abundant rains. In Eastern Europe, the excessive rainfall hampered the sowing of winter crops.

In Poland, dry conditions have persisted since summer. The winter crops sown in September therefore germinated under unfavourable conditions which further worsened due to the low temperatures that occurred in October. Similar problems occurred in the Baltic countries, especially Lithuania. In Ukraine and Russia. Reports out of the Black Sea are suggesting 50% of the winter wheat is rated in poor condition. This story is unlikely to play out until the northern hemisphere spring.

The Russian wheat plantings pace is at the 5yr average, however in Ukraine continues to lag and is about 12 to 17 days behind where it should be and is at 82% complete.

Local pricing has followed the offshore market higher this week making gains of $ 6-9 across all zones. However the full extent of the gain has not been passed along, as basis continue to slide.

151110

To read the full report follow the below link.

Weekly Report 15_10_30

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