USA: Grain markets continue to be lower following July WASDE

The USDA's World Agricultural Supply and Demand Estimates report, released on July 12, 2022, provided a mixed outlook for key crops, with slight reductions in production estimates for 2022 soybeans and corn, despite higher than expected spring wheat, durum, and wheat production. The report also indicated slight decreases in domestic corn, soybean, and wheat ending stocks for the 2021/22 marketing year, alongside minor adjustments for the 2022/23 marketing year.

Grain market analyst Jacqueline Holland highlighted the report's bearish tone, especially for soybeans, attributing it to buyer hesitance due to a potential global recession and high commodity prices. The larger U.S. corn crop, alongside expectations of demand destruction and reduced usage, has led to increased ending stocks, despite a smaller crop from Paraguay and reduced global usage due to high prices. The soybean market faces demand threats, particularly in export markets, as high prices are expected to drive demand destruction in the new crop marketing year. Wheat markets remain competitive, with increased export forecasts for the 2022/23 marketing year, driven by lower prices making U.S. grain more competitive internationally. However, hot and dry weather in the European Union and Canada, along with the ongoing Russian invasion of Ukraine, have led to significant production cuts in wheat, resulting in reduced global domestic usage estimates.