WASDE: Slow wheat sales expected to feature, weather disregarded

On Friday, the US will release its first forecast of the calendar year for agricultural crops, with downward revisions for exports out of the US and the EU and an increase in Russia on the cards, analysts say.

USDA export figures were revised down by 680,000 mt at the December update, and are likely to be lowered further still on Friday, sources say.

Total exports for all wheat in the 2017/18 marketing year stood at 13.66 million mt as of December 28, down from 14.79 million mt at the same stage last year.

This comes at a time when the US is expected to increase exports 5.5% from last year.

Benson Quinn Commodities is expecting wheat to be hit as part of a wider lowering of exports, with carryover stocks subsequently increased for all major commodities and putting downward pressure on prices.

Outside of poor US sales, however, there is a prospect of a further upwards adjustment for Russian exports.

Sales ex-Russia continue at pace with no apparent slowdown, despite the strain placed on its logistics capacity.

The USDA upped its forecast by 500,000 mt at its previous update to 33.5 million mt for 2017/18, a figure that remains well below the semi-official numbers from the ministry of agriculture, which have been as high as 40 million mt.

EU sales, meanwhile, continue to lag previous years, with last Friday’s data release showing exports down 20.2% year-on-year at 10.59 million mt.

Suffering the dual effects of unprecedented competition from Russia as well as a strong euro, there is now only a slim prospect of EU exports matching the USDA’s expectations of 28.5 million mt.

Winterkill

And while all the talk in the past week has been of cold and drought in the US, it is worth remembering the threat of winterkill will not factor into Friday’s report.

The earliest WASDE to address the 2018/19 crop will be in May, while the full extent of any potential damage will remain an unknown factor for many months to come yet.

Those with an interest in what will happen with the 2018/19 crop may want to keep an eye on the Winter Wheat and Canola Seedings report, also released by the USDA Friday.