Latest WASDE Report Sees Higher Stocks for Many Commodities

The USDA’s latest World Agricultural Supply and Demand Estimate was released this week, citing larger-than-predicted US surpluses for corn and wheat. Increased competition from Canada and South America have slowed US exports of those commodities by 25 million bushels, the lowest since 1971-1972. These 25 million bushels have also pushed US wheat ending stocks to the largest volume since 2009-2010. For corn, US ending stocks increased by 35 million bushels this month.

Globally, wheat and corn production also increased, with wheat production at a record high and continuing to rise this month by 0.4 million tons. Global 2015-2016 wheat supplies increased by 2.1 million tons based on larger beginning stocks in many countries, particularly China. The world’s overall wheat beginning stocks increased by 1.7 million tons. Wheat consumption, on the other hand, is down worldwide by 4.7 million tons; this decrease is led by China, which saw wheat consumption fall by 4 million tons due to a government-mandated reduction in the use of wheat in favor of other grains for both food and feed use. Global ending stocks for wheat have increased by 6.8 million tons, reaching a record 238.9 million tons.

Global coarse grain supplies (including corn) are estimated 1.3 million tons higher, led by higher corn production in Brazil and Argentina. In Brazil, corn production increased by 2.5 million tons, as first-crop yields were larger than anticipated and strong domestic corn prices have encouraged higher second-crop plantings. Argentina’s corn production also increased by 1.4 million tons due to higher planted area. South Africa, on the other hand, saw decreased production as a result of the ongoing drought .

Global consumption of coarse grains increased by 0.9 million tons; the largest change came from China, with a 2-million-ton increase in its corn feed use (as a result of the aforementioned government policy). Corn use also increased in Mexico, India, and Turkey, but this was slightly offset by corn feeding reductions in Brazil and Argentina. Global coarse grain ending stocks for 2015-2016 are predicted to be slightly higher.

Soybeans are also seeing an increase in production worldwide, driving total global oilseed production estimates up to 527.4 million tons. Soybean production in Argentina rose by 1.5 million tons due to beneficial rains. Higher soybean ending stocks in Argentina, the US, and Turkey have offset lower stocks of other oilseeds, such as rapeseed, leading to overall global oilseed ending stocks of 91.2 million tons.

For rice, on the other hand, estimated global supply was reduced this month by 1 million tons due to decreased production in Thailand and Brazil, and throughout Central America, again largely driven by ongoing drought . While rice consumption also declined slightly, the reduction in supply outweighs this, leading to global ending stocks of 89.3 million tons, the lowest seen since 2007-2008.