USDA releases February 2016 WASDE report

Feb 10, 2016

Wheat production up 1.3 percent in the United States

By Diego Flammini
Assistant Editor, North American Content
Farms.com

The United States Department of Agriculture (USDA) released its World Agricultural Supply and Demand Estimates report (WASDE) for February on Tuesday.

The report includes different commodities from around the world but the focus here will be on the United States and Canada’s production of corn, soybean and wheat.

Corn, soybean and wheat

Wheat
The WASDE report estimates that 735.8 million tons of corn will be produced in 2015/16, representing a 0.1 percent increase from the January WASDE.

The United States is estimated to produce 55.8 million tons, while it’s suggested Canada will produce about 27.6 million tons – a 6.2 percent decrease from 2014/15.

The average market price for wheat could be between $4.90 and $5.10 per bushel – a 16.5 percent drop from 2014/15.

Corn
Global production for corn is estimated to be about 970.1 million tons, which is a 3.9 percent decrease from 2014/15.

The United States is forecast to produce about 345.5 million tons – down 4.3 percent from 2014/15. On the other hand, Canada’s corn production is forecast to increase by 18.4 percent from 11.5 million tons in 2014/15 to 13.5 million tons in 2015/16.

The average market price for corn would range from $3.35 to $3.85 per bushel – a drop of 2.7 percent from 2014/15.

Soybean
World soybean production is estimated at 320.5 million tons for 2015/16, an increase of 0.5 percent from 2014/15.

The United States is forecast to account for 107 million tons while Canada didn’t factor into the WASDE’s soybean statistics.

The average price per bushel of soybean could range from $8.05 to $9.55 – a drop of nearly 13 percent from 2014/15.

Farms.com Risk Management’s Managing Commodity Strategist Moe Agostino hosted a detailed WASDE webinar breakdown and provided tips for farmers to consider this year.

The next WASDE report is due out on March 9.

Video: Will the 2025 USDA December Crop Report Be a Market Mover/Surprise?

Historically, the USDA December crop report is a non-event or another dud report as the USDA reserves any final supply changes to the final report in January of the following year in this case 2026. But after the longest U.S. government shutdown in history at 43 days and no October crop report will they provide more data/surprise and make an exception?
Our China U.S. soybean purchase tracker is now at 26.6% or a total of 3.2 mmt but for traders it’s taking too long to unfold.
The final Stats Canada production report was bearish canola and wheat projection a record crop in both (it adds to the global glut of supplies) and bullish local corn and soybean prices in Ontario/Quebec thanks to a drought. It will not help the fund flow short-term, the USDA may need to offset it?
A U.S. Fed interest rate cut of another 25-basis point next Wednesday (probability 87.1%) could help fund flow and sentiment in stock and ag commodities into year end.
More inflows into Bitcoin this past week saw prices rebound back above 90,000 with support at 82,000 and resistance at 96,000.
A V-shaped bottom in cattle suggest the lows are in after Mexico reported another new world screwworm case. Lower weights, seasonal demand and higher U.S. beef select/choice values with a continued closure of the Mexican border to cattle will result in a resumption of higher cattle futures into yearend.
Australia is expected to produce its 3rd largest wheat crop ever at 36 mmt adding to the global glut of supplies.
Reports of ASF in hogs in Spain the largest pork exporter in Europe could see the U.S. win more pork export business long-term.
If the rains verify into next week of 3-5 inches for Brazil it would go a long way to fixing the dry regions from the last 2-months, but the European weather model has been wrong for the past 2-months!
Natural gas futures are surging to the 3rd price count as frigid hold temps set in.
CDN $ is also surging to end the week on a very resilient economy and better employment numbers suggesting no interest rate cuts next week.
Finally, the CFTC report showed funds were net buyers of soybeans but sellers of corn, canola and wheat. In real time the funds have gone back to selling as they take some profits.