Market Insights|1 min read|August 13, 2018

[Tridge WASDE Review] August 2018 : Soybean / Wheat / Corn

USDA released the monthly WASDE report on 10 August 2018. Some major changes were made to MY2018/2019 production projections: soybean ↑, wheat ↓, and corn ↑.

Content
Soybean: The US Production Estimate Raised Further
Wheat: The EU Production Forecast Down for Three Consecutive Months
Corn: FSU and the US Productions to Boost
References
Author:
Eunyoo ChangIndustry Analyst - Tridge

Soybean: The US Production Estimate Raised Further

Source: USDA, Tridge

In August 2018 WASDE report, while there were no significant changes in forecast data for other countries, USDA raised the projection on the U.S. soybean ending stocks for two consecutive months for MY 2018/2019 to 21.3 MMT, up 5.6 MMT from the July report. Despite the lowered projection on the beginning stock and higher projection on domestic consumption and exports, month-on-month change on the U.S. ending stock estimate was positive due to a significant increase in production forecast to 124.8 MMT, up 7.5MMT from the July WASDE report.

Such higher soybean production forecast for the U.S. was mainly attributable to expected higher yield. While there was no change made to the forecasted size of the planted area, survey-based soybean yield was forecasted at 51.6 bushels per acre, up 3.1 bushels from the July survey. Driven by raised production forecast of the U.S., world soybean ending stocks are estimated at 105.9MMT in MY 2018/2019, up 7.7MMT from the previous month’s projection.

Wheat: The EU Production Forecast Down for Three Consecutive Months

Source: USDA, Tridge

USDA lowered the projection on global ending stocks to 259 MMT for MY 2018/2019, down 1.9 MMT from the July WASDE report. This reduced ending stock is mainly attributable to the lowered production estimate driven by the EU. Continued dry weather in wheat exporting countries is expected to damage the crop, especially in the Northern European countries. The EU countries are expected to produce 137.5 MMT in MY 2018/2019, down 7.5MMT from the previous month’s forecast. USDA lowered the EU production projection for MY 2018/2019 for three consecutive months, down 13 MMT from the initial forecast of 150.5 MMT in May WASDE report.

Corn: FSU and the US Productions to Boost

Source: USDA, Tridge

USDA raised global ending stocks to 155.5MMT for MY 2018/2019, up 3.5 MMT from the July WASDE report. Such higher ending stocks forecast was driven by higher production estimates for the U.S. and former Soviet Union (FSU) countries. USDA raised the U.S. production forecast by 9.1MMT from the previous month, based on the expectation of higher corn yield per acreage in MY 2018/2019. However, such higher projection was partly offset by an expected increase in domestic use and export and lowered production projections for the EU countries and Brazil. The production forecast for FSU countries was also raised by 1.2MMT on the expectation of improved yield backed by favourable weather.

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Editor: Eunyoo Chang / eunyoo.chang@tridge.com

Sourcing Team Expert: Eunjee Lee / eunjee.lee@tridge.com

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References

1. https://www.usda.gov/oce/commodity/wasde/


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