International

The USDA report was, for the most part, within pre-report estimates. Headlines were as follows;

US winter wheat area = trade was looking for 34.255m/ac – USDA gave us 34.397m/ac, up 2% from 2021

Corn stocks = trade looking for 11.602 bbu – USDA gave us 11.6bbu

Wheat stocks = trade looking for 1.421 bbu – USDA released 1.39bbu

Soybean stocks = trade looking for 3.129 bbu – USDA gave us 3.15 bbu

The WASDE report

21/22 global wheat ending stocks +2.4Mt @ 279.95Mt (278.67Mt expected)

21/22 global wheat production +0.7t @ 778.60Mt. Argentina 20.5Mt (+0.5), Australia 34.0Mt (unch), Canada 21.65Mt (unch), EU 138.9Mt (+0.2Mt), Russia 75.5Mt (unch), USA 44.79Mt & Ukraine 33Mt

US corn ending stocks +47mbu to 1.540bbu (1.472bbu expected)

Corn production 15.115bbu (15.069 expected), slight increase in harvested area

Soybeans ending stocks 350mbu (348mbu expected)

Soybeans production 4.435mbu (4.433mbu expected)

21/22 world bean ending stocks 95.2Mt, -6.8Mt (99.93Mt expected)

Take away messages as follows;

US wheat production and ending stocks higher than expected, with exports pulled back given the sluggish pace. Globally, no changes to Australia, they dropped Russian exports which flowed through to global carryout. December stocks for wheat were lower than expected despite the ending stocks being the other way. Moderately bearish report for wheat.

US corn saw slightly higher stocks and production, but again the Dec stocks were in line with expectations. Globally the South American weather is already having an impact on USDA corn production. Pretty neutral report

US beans in line with expectations, but global cuts to Brazil and Argentina are sending a signal. Neutral to slightly bullish beans.

Australia

Local cereal markets firmed. Wheat was up $3-5/t yesterday across the board. Towards the end of the day we saw more trading activity in WA and SA.

Barley continued to catch a bid with values firmer by $5/t. SA port zone values were trading around $310 Adelaide and $315 Port Lincoln.

Canola values were lower over the day with bids softer by $8-10.

We now see the bulk export program build for the last half of January and into Feb with appx 1.8Mt of all grains on the line-ups across the Aussie port zones. Execution programs remain a high priority, with increasing covid-positive cases putting pressure on staffing at sites and the tight logistic market we have had for some time now.

Further harvest delays hit parts of western Victoria as showers push through this morning and still reports of high moisture wheat crops that headers are unable to get onto.