Analysis of April USDA WASDE
Wheat prices renewed their decline after the USDA, in its monthly Wasde report, raised its forecast for world stocks at the close of 2025/26 by far more than the market had expected.
Wheat futures had earlier made some headway, supported by some stabilisation in oil markets, which remained modestly higher in late deals. Brent crude futures for June-26 stood up 0.1% at $94.84/Bbl. The flow of vessels through the Strait of Hormuz remained limited, despite the Iran-US ceasefire.
However, wheat prices renewed their slide after the USDA in the Wasde lifted its forecast for world carryout stocks by 6.2Mt to 283.1Mt, “24Mt or 9% higher than last year”.
Investors had expected the number to be held at 277.0Mt.
Chicago soft red winter wheat futures for May-26 traded down 1.2% in afternoon deals, falling below its 50-day moving average for the first time in two months.
In Paris, milling wheat for May-26 settled 1.1% lower, at its 100-day moving average. London feed wheat for November-26 also shed 1.1% to dip below its 200-day moving average.
Corn also traded lower in Chicago, after a slightly bigger-than-forecast rise in the Wasde to the world stocks figure.
Soybeans made modest headway, after the USDA trimmed its forecast for global inventories.
Rapeseed futures for May-26 settled unchanged in Paris. The USDA made few significant changes to its balance sheet estimates, bar a 200Kt trim to the Australian stocks forecast on an increased expectation for exports.
Below details on key changes in the Wasde report.
Corn - Rain-backed South Africa leads harvest upgrades
The USDA in the Wasde made no changes to its estimates for the US corn balance sheet in 2025/26, although the forecast for farmgate prices was lifted by $0.5/Bu to $4.15/Bu “based on reported prices to date”.
At a global level, the forecast for end-of-season stocks was lifted by 2.0Mt to 294.8Mt, a bigger upgrade than the market had expected, reflecting a series of improved harvest ideas in countries such as Indonesia, Russia and South Africa.
The South Africa harvest estimate was raised by 800Kt to 17.3Mt “based on increases to both area and yield with the latter reflecting above-average rainfall observed in most regions during the growing season”.
Soybeans - Increased US crush makes up for China dent to exports
The USDA raised its forecast for the US crush this season by 950Kt to 71.0Mt “on increased soybean meal domestic use”, a revision offset by a downgrade in the export forecast to a 13-year low of 41.9Mt “on pace to date and higher South American shipments”.
Indeed, the forecast for Brazil’s 2025/26 exports was raised by 1.0Mt to 115.0Mt, and for Paraguay’s by 500Kt to 8.2Mt, record highs in both cases.
The estimate for world carryout stocks was, unexpectedly, trimmed by 500Kt to 124.8Mt, taking it marginally below the year-ago figure.
Wheat - EU, Russia help lift exporter supplies to eight-year high
The USDA raised its forecast for 2025/26 world wheat stocks by 6.2Mt to a six-year high of 281.1Mt, surprising traders, who had expected little change in the report.
Some of the upgrade was attributed to importing countries, such as Bangladesh, while the estimate for India’s carryout hiked by 4.8Mt to 22.0Mt “on reduced food, seed, and industrial use”.
Government data for the first 11 months of the country’s marketing year “indicate higher stocks than previously estimated implying less domestic use”, the USDA said.
Nonetheless, 1.9Mt of the world stocks upgrade reflected increases to estimates for the major exporters, whose supplies are particularly influential on prices.
Argentine, EU and Russian stocks forecasts were lifted to reflect increased harvest estimates, while decreased export expectations spurred a 500Kt increase to 4.6Mt in the estimate for Australia’s inventories.
The revisions lifted the forecast for exporters’ stocks as compared with world use by 0.2 points to 9.1%, matching an eight-year high.
