The May Wasde report is significant as it provides the first glimpse of new crop prospects globally. It follows a number of regional country based attache reports as well as a multitude of private estimates which we have reported in in our grain and oilseeds reports in recent weeks, providing subscribers with market expectations for this major data release.

Wheat futures leaped as the USDA, in the May Wasde, forecast another decline in world stocks, fuelled by a drawdown in major exporters’ inventories.

The USDA forecast wheat bucking a trend of rising world grain inventories overall in 2023/24. World wheat stocks will shrink for a fourth successive season in 2023/24, by some 2Mt to 264.3Mt, the lowest in eight years.

The drawdown will be led by a slide of more than 7Mt, to 52Mt, in inventories held by the top seven exporters, supplies which are particularly important for determining international prices.

Chicago soft red winter wheat futures for July-23 bounced 3% in the immediate aftermath of the briefing before easing back to show 2.5% gains.

Hard red winter wheat futures for July-23 stood up 4.5%, after earlier hitting a five-month high, as the USDA unveiled a lower-than-expected forecast for domestic wheat production this year, amid poor prospects for the drought-hit harvest red winter wheat crop.

European contracts showed more cautious gains, undermined by some reports of further progress in renewing the Black Sea grain initiative. Paris milling wheat for September-23 added 1.4%, while London feed wheat for November gained 1.2%, despite the release also of some strong UK export data for March. Wheat exports topped 200Kt for the first time since October 2019.

Chicago corn futures for July-23 lost early gains, after the Wasde showed a larger-than-expected forecast for US stocks at the close of 2023/24, reflecting bigger yield and harvest estimates than investors had pencilled in.

Chicago soybean futures July-23 also struggled, shedding 0.3%, as the USDA also unveiled a bigger than-expected forecast for US stocks at the close of next season, reflecting a expectations of a dip in exports.

CRM will reveal more detailed analysis in next week’s Monthly report on grain and oilseed markets.
Chart of the week: May USDA Wasde: