Analyst Insight: WASDE washup

Thursday, 13 January 2022

Market commentary

  • UK feed wheat futures (May-22) dropped £2.95/t yesterday to £217.00/t, to close at its lowest price since October 2021. New-crop (Nov-22) only slipped £0.90/t to close at £193.50/t.
  • Chicago soyabeans (May-22) jumped $4.68/t yesterday following the bullish USDA report (read more below) to close at $517.39/t. Using latest estimates, global stocks-to-use for 2021/22 is 25.4%, down from 27.1% in Dec-21 and the lowest since 2015/16.
  • AHDB usage data, up to November-end, is now available online. This includes GB animal feed production and UK human and industrial cereal usage.

WASDE washup

Yesterday, the USDA released (among other reports) their January update to their World Supply and Demand Estimates (WASDE). Markets reacted in various ways, with maize and soy numbers most anticipated.


Chicago maize futures (May-22) gained $1.28/t in the final hour of trading yesterday but closed the day at $236.52/t, down $0.69/t from the previous day. The market (Chicago, May-22) has continued to slip further at the time of writing this morning. Cuts to South American production were generally in line with trade estimates, according to a Refinitiv poll.

Table displaying USAD South American maize production estimates vs pre-release trade estimates

However, the USDA may have reduced their Argentine and Brazilian maize estimate, but this still differs from current predictions from local reporters. Argentine maize production estimates vary from 48.0Mt to 57.0Mt currently. This said, Bolsa de Cereales will publish their weekly update later today and the high end of 57.0Mt may be reduced. The USDA Brazilian estimate of 115.0Mt sits above Conab’s latest estimate of 112.9Mt. With this in mind, we could see the current production cuts stepped down further in the February estimates. 

   Table displaying USAD South American soy and maize production estimates vs local reporters

Global maize production was reduced by 1.77Mt, with an increase to US and Ukraine production estimates softening South American cuts. Global consumption was increased by 2.26Mt, mostly driven by the US and therefore ending stocks were also down from the last report.


The Chicago soyabean May-22 contract closed yesterday at $517.39/t, up $4.68/t. After the WASDE report was published yesterday, the contract jumped $5.14/t before trading ended for the day.

Soyabean predictions were cut more drastically than maize in the USDA report. The Brazilian production estimate saw 5.0Mt axed, pegging 2021/22 production at 139.0Mt, below even the low end of trade estimates. Argentine soyabean production was estimated at 46.5Mt, down 3Mt from the December update, at the lower end of trade estimates.

Table displaying USAD South American soy production estimates vs pre-release trade estimates

Again, USDA estimates differ from local reporters as shown in the table below.

Table displaying USAD South American soy and maize production estimates vs local reporters

Global soyabean production was estimated at 372.6Mt, down 9.2Mt from Decembers report. Consumption (global) was also reduced this month but by just 2.1Mt to 374.9Mt resulting in global ending stocks down 6.8Mt at 95.2Mt.


Global wheat markets lost ground yesterday and have continued to at the time of writing. Focusing on the May-22 contracts, Chicago wheat lost $4.78/t yesterday to close at $279.32/t Meanwhile Paris wheat lost €5.00/t to close at €209.50/t and London wheat lost £2.95/t to close at £217.00/t.

The USDA pegged global wheat production at 778.6Mt, up 710Kt from the December estimate, mostly driven by increased estimates for Argentina. However, at the same time global consumption estimate dropped 1.2Mt to 785.6Mt, resulting in end stocks being revised up (1.8Mt) to 279.9Mt.

US seedings report also pegged the domestic wheat area for harvest-22 above average analyst estimates (Refinitiv) at 13.92Mha. That’s a 2% rise from harvest-21 and 13% up from harvest-20. This, along with pressure on old-crop markets, is weighing on new-crop prices.

What does this mean for the UK?

Much of the news around the USDA reports focuses on changes to estimates further afield. However, with UK supply and demand relatively tight this year for both cereals and rapeseed, domestic pricing has tracked global markets closely this season. Therefore, any effects to Chicago and Paris futures markets will generally translate into domestic prices.

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