- February’s WASDE report did not contain any major revisions to the outlook for grains.
- The report was relatively bullish for wheat and corn following higher projected demand and lower projected output.
- It was marginally bearish for soybean due to higher projected output and lower demand.
- The market reaction following the release was relatively muted.
On Monday, February’s World Agricultural Supply and Demand Estimates (WASDE) from the US Agricultural Department (USDA) were released. Most notably, the projected world demand for corn and wheat in 2013/14 was revised up, while the projected wheat and corn output was revised down. Projected demand for soybeans was revised down whereas projected soybean production was revised up. Consequently, wheat and corn ending stocks have been revised down and soybean ending stocks have been revised up.
The revision to world corn demand is mainly due to higher projected European demand, but also due to slightly higher projected demand from Egypt. The downward revision to soybean demand was mostly due to lower projected Argentine soybean use. Higher projected Brazilian soybean output is the main cause for the upward revision in projected world soybean output, while projected Argentine production has been revised down.
Overall, February’s WASDE report did not contain any major changes to the outlook for grains this year. It was on the bullish side for wheat and corn and slightly bearish for soybean. The rather dull report was reflected in the market reaction following the release of the estimates, which was relatively muted.
In general, grains prices have climbed higher since the beginning of the month on the back of a couple of positive demand revisions. The mounting supply outlook is probably more or less reflected in the current prices and the market has likely turned its attention to the demand situation, which has turned more benign recently. Hence, there may be no further bearish surprises left in the grains market in the short term.
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