- A summary of today’s USDA’s April WASDE report for each of the three key agri products is available to download; please click on the link below:
- The report’s authors did mostly as expected by not responding in their final balance sheet with the residual change which was indicated in the March 1st stocks report. We expect greater exports and ethanol grind over the next 90 days (compared with current estimate). The level of soybean exports and crush has to reduce immediately to meet the WASDE numbers.
- Bottom line – this report is not bearish, however the majority are not prepared to get bullish right now. Cash basis should, on the back of this, continue to strengthen.
- In other news, Brazil has agreed to double its wheat import quota for purchases outside the MERCOSUR free trade bloc (Argentina, Brazil, Paraguay, Uruguay and Venezuela) from 1 to 2 million mt. The measure is in response to below average production in the region and fears for increasingly tight stock levels.
- In the US last night’s hard freeze affecting key hard red winter wheat regions of W Kansas Oklahoma and W Texas is feared to have caused severe crop damage. The crop, as it starts to flower, is especially sensitive to freezing temperatures which can cause irreversible damage. One saving grace is that the crop is delayed as a result of unseasonal low temperatures and has not yet reached the flowering stage, currently it is still jointing. Clearly the ongoing cold period is a potential threat to an already pressed crop.
- As always, we will continue to study today’s release and comment further if appropriate.