September 18 Dan Maltby Marketing Newsletter
Tuesday’s USDA’s September WASDE update was another bearish wheat report, although some interesting slight-of-hand trickery muted somewhat the impact of Russia’s big wheat crop getting bigger.
This table shows the dramatic gains throughout the summer in Russian wheat production estimates, compared to the USA estimates in the same period:
Russia’s September wheat crop estimate increased 500 million bushels over the summer. (The USA’s September estimate dropped 80 million bu in that time.) The 81 million metric tonne estimate is a new record wheat production for Russia.
The reason this wasn’t viewed very bearishly was the retroactive reductions in the previous two years of Australian wheat production. This year’s Aussie wheat crop estimate was cut as well, although that’s easier to understand as the crop hasn’t been harvested, and it’s been too dry Down Under.
This 4.5 million tonne disappearance in the Australian wheat situation (plus a .7 mmt cut to the EEU’s current wheat crop estimate) helped offset the Russian increase, and allowed the USDA to show a decrease to world wheat ending stocks, which is a rare feat.
That’s the good news. The bad news is I don’t see how they can do that again to Australia, at least for a few years.
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Source: Kansas Association of Wheat Growers