European market

In a particularly quiet market at the start of the week, both on the macroeconomic front and in terms of trade flows, the release of the USDA’s monthly report on Tuesday 10 February stands out as the main event.

As expected at this time of year, when most production figures are already known, fundamentals have moved very little. Prices therefore saw limited fluctuations yesterday on Euronext both during the session and at the close.

For wheat, Argentina is the only major exporter to see its production revised higher again by the USDA, reaching a new all-time record of 27.8 mn t versus 27.5 mn t last month and 18.5 mn t last year. Production in importing countries, however, is revised lower, leading the USDA to show a global production decrease of -0.4 mn t from last month to 841.8 mn t, still a record and +41.4 mn t above last year. Global consumption changed little over the month. As a result, global ending stocks were slightly revised down to 277.5 mn t versus 278.25 mn t in January.

Note the heavier balance sheet for the EU27 in wheat, with higher imports and lower exports. Stocks were therefore raised by +0.45 mn t to 15.66 mn t compared with 11.66 mn t in the previous season.

After last month’s shock regarding the burdened US corn balance sheet, the USDA was more moderate in February. Global corn stocks were nonetheless revised down by -1.9 mn t on the month to 290 mn t, mainly driven by a +1.4 mn t increase in feed demand to 814.6 mn t.

For soybeans, Brazil is the only major exporter to see its production revised by the USDA. It increases by 2 mn t on the month, reaching the record of 180 mn t. Added to this is a +0.5 mn t production increase in Paraguay, contributing to a +2.5 mn t rise in global soybean output on the month to 428.2 mn t. This is accompanied by a +1.6 mn t increase in feed demand. As a result, global stocks rose by only +1.1 mn t to 125.5 mn t versus 123.66 mn t in the previous season.

American market

Prices moved in mixed fashion across products yesterday evening in Chicago. Wheat ended slightly lower due to a small increase in US ending stocks of +0.13 mn t to 25.34 mn t in the USDA’s February WASDE report, caused by reduced demand for human consumption.

Corn, by contrast, posted a very modest rise after the publication of US ending stocks down -2.5 mn t on the month to 54 mn t, driven by an equivalent increase in exports to a new all-time record of 83.8 mn t. Recall that US corn exports, already very strong last season, had peaked at 72.6 mn t.

Soybeans saw the most pronounced gains yesterday evening in Chicago. The market remains driven by the prospect of additional sales to China and by the strong firmness in soybean oil. This comes even though the USDA did not make any changes to the US soybean balance sheet in the latest WASDE report.

Black Sea market

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