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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.
