Analysis of March USDA WASDE
Wheat markets dipped even as the USDA in its flagship Wasde report trimmed its stocks forecast, with the revision overshadowed by volatility stoked by the Iran war.
The monthly Wasde crop is typically a highlight of the grain market month, bringing fresh supply and demand estimates from the USDA, whose data set world benchmarks.
However, with the briefing making few substantial revision – a 1.7Mt upgrade to the forecast for Argentina’s wheat exports being an exception – the report was overshadowed by Iran war considerations.
Brent crude - viewed as a broad market barometer given the Middle East’s importance in oil – shed 14.6% in late deals to return to $84.51/Bbl. That represents a $35/Bbl retreat from the last session’s high.
The decline was attributed to comments by US President Donald Trump that the Iran war could end soon, trimming concerns of prolonged disruptions to Middle East energy supplies. Israel’s Foreign Minister Gideon Saar said that the country was not seeking an “endless war”.
The selling spilled over into grains, which have a decent price correlation with oil, and which traded broadly unchanged after the Wasde, compared with pre-report levels.
Wheat futures for May-26 traded down 2.5% in lunchtime deals in Chicago, while settling in Paris down 2.7% and in London down 1.4%.
Paris rapeseed for May-26 shed 2.5%, before finding support at the €500/t mark.
Below details on key changes in the Wasde report.
Corn - Brazil crop upgrade helps lift world stocks above expectations
The USDA in the Wasde report raised by 1.0Mt its estimate for 2025/26 corn production in Brazil, citing a “small rebound” in sowings and “positive” yield results from the early harvest.
The estimate for Ukraine’s 2025 production was lifted by 1.7Mt to 30.7Mt, a gain of nearly 4Mt year on year, citing the country’s own official statistics.
The upgrades were offset in part by a reduction of 1.0Mt to 52.0Mt in the forecast for Argentina’s newly-started corn harvest “as dryness during February reduces yield prospects”.
With forecasts for 2025/26 world trade little changed from last month, and carry-in stocks higher, the USDA raised its forecast for world carryout stocks of corn by 3.8Mt to 292.8Mt.
This was above the 289Mt figure that traders had expected, although this still represents a small drawdown year on year.
Soybeans - Argentine output, Iran import estimates reduced
The USDA made few changes to its world soybean supply and demand forecasts, leaving the forecast for world carryout stocks trimmed by a modest 200Kt to 125.3Kt.
Argentina’s harvest was downgraded by 500Kt to 48.0Mt, thanks to a dent to yield prospects from “inadequate soil moisture reserves”.
“Rainfall during the months of January and February was very heterogenous and limited in terms of total accumulation,” the USDA said.
However, the revision was largely offset by chances to demand estimates.
The USDA made only superficial changes to the US soybean balance sheet, making no reference to the potential for further exports to China.
The forecasts for soybean imports by war-torn Iran was lowered by 200Kt to 2.6Mt, with similar downgrades to crush and consumption forecasts too.
Wheat - ’Strong sustained sales’ prompt fresh Argentine export upgrade
The USDA trimmed the estimate for Australia’s 2025/26 wheat harvest by 1.0Mt to 36.0Mt, on a reduced area figure.
However, the downgrade was offset by a 1.0Mt upgrade to the Ukraine harvest estimate, with Kazakhstan’s output figure revised up too.
Export forecasts received more significant revisions. The USDA lifted its figure for Argentina’s shipments by 1.5Mt to 19.5Mt, saying that “competitive prices” were “leading to strong sustained sales and exports”.
The forecast for Kazakh exports was raised too, by 800Kt to 10.5Mt, on ideas of “strong regional exports and a slightly larger crop”.
These revisions were offset by reductions to forecasts for EU, Russian and Ukrainian exports, on “sluggish” shipments from all three origins.
The forecast for world wheat stocks at the close of 2025/26 was trimmed by 550Kt to 277.0Mt, in line with market expectations.
Rapeseed - Australia’s stocks to make rare foray above 1.0Mt
The USDA lifted its estimate for Australia’s harvest by 480Kt to 7.7Mt, echoing an upgrade by the country’s own Abares bureau last week.
However, while some of the extra output was swallowed up by Australian demand and exports, 200Kt was added to the figure for carryout stocks from 2025/26.
Australia’s canola stocks are now expected to exceed 1.0Mt for only the third time on record.
Estimates for canola supply and demand in the EU, Canada, Ukraine and China were unchanged.
