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Little change in December WASDE report

By Staff | Dec 26, 2019



Neither bear nor bull showed their presence in last week’s USDA’s December World Agricultural Supply and Demand Estimates (WASDE) report.

“Overall, it was a very neutral looking report for our three grains today,” said Todd Hultman, DTN grain market analyst.

Hultman called the December WASDE report a “formality” where we typically do not see a lot of big changes in numbers, and that was the case.

The ending stocks estimate for corn remained at 1.91 billion bushels (bb) and although there were some expectations the corn export numbers would change, they stayed the same as well.

“There was an expectation that exports would be reduced for corn,” he said. “Exports for corn have been down significantly this year, but USDA made no changes to the export estimate in their December WASDE report.”

And the same rang true for soybeans.

“There were no U.S. changes whatsoever,” Hultman said. “There was no change to crush demand or exports.”

Ending stocks for U.S. soybeans remained at 475 million bushels (mb).

Out of the three grains, wheat did see a small change.

“Instead of the old ending stocks estimate of 1.014 billion bushels, we’re down to 974 million bushels that was a 40 million bushel reduction and it came in two parts,” he said. “One, there was a reduced import estimate of 15 million bushels and then there also saw 25 million bushels increase in the wheat export estimate a little better trade helping the wheat ending stocks situation.”

Hultman added that instead of a 48 percent of annual wheat use, the number was lowered to 46 percent on U.S. ending wheat stocks.

“That was slightly favorable for the wheat market,” he said.

World numbers

“As far as world numbers today, there were a couple of small surprises and most of them had the topic of China in front of them as a result,” said Hultman.

The world corn ending stocks estimate, Hultman said had an increase from roughly 296 million metric tons (mmt) to up over just 300 mmt.

“The significant part of that increase came from an increase of the corn crop estimate for China which was raised 6.8 million metric tons for almost 270 million bushels,” he said. “That was the only significant change in the world corn numbers for December. Keep in mind, China is not a major exporter for corn, the fact they grew more corn does not have a big impact on the world corn price.”

For soybeans around the world, Hultman said the December WASDE report brought a small change going from 95.4 mmt up to 96.4 mmt.

“And again, guess who? China. China’s production estimate was actually increased one million metric ton and so that explains the entire estimate,” he said.

Another number to note, Hultman said, is China’s import estimate for soybeans that remained unchanged to 85 mmt and they’re estimate of total soybean demand was also unchanged at 102.2 mmt.

“There was no change in the expectation of China’s consumption or their import total, but there was a slight increase in their production total,” he said.

As far as wheat, Hultman said there was a small increase in world ending wheat stocks.

“We are still talking about a record high level of ending wheat stocks in the world situation at 289.5 million metric tons,” he said. “That was up slightly over one million metric tons from last month’s estimate.”

Hultman said there were slight reductions in wheat stocks from Argentina, Australia and Canada with slight increases in Europe and Russia that ultimately offset the decreases.

“The one thing that boosted the ending stocks estimate a little bit this time, again China. The USDA increased the production estimate of wheat in China, and again, China does not export wheat, so that’s not a major influence on our world wheat price.”

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