Analysis of August USDA Wasde

Grain prices eased from highs after the USDA, in its Wasde report, hiked its forecast for US corn sowings, and lifted expectations for major exporters’ wheat stocks as well.

However, prices remained well up for the session, remaining buoyed by supply concerns fuelled by Ukrainian attacks which forced the closure of two terminals at Russia’s key port of Novorossiysk.

Below details on key changes in the Wasde report

Wheat - Heat hurts EU, UK crops. ’Disruptions’ dent Russia, Ukraine exports

For wheat, the USDA made only marginal changes to the estimate for the US balance sheet, trimming its production forecast by 160Kt to 41.7Mt on a slightly lower yield figure.

However, at a global level, it made more significant changes, including downgrades of 1.8Mt to 134.2Mt in the forecast for EU production and of 1.5Mt to 12.0Mt in the UK harvest estimate. It cited that, in both cases, “prolonged above-average temperatures this summer during grain fill affecting yields”.

For the UK, the reduced production figure will lift 2026/27 import needs to 3.6Mt, 1.1Mt more than previously forecast.

The EU production cut was offset by a reduced feed demand number.

In the Black Sea, the USDA cut its forecasts for both Russian and Ukrainian wheat exports, by 1.5Mt and 1.0Mt respectively, citing “disruptions” to shipments in both countries.

Russia’s exports are now seen shrinking by 2.0Mt year on year to 46.0Mt, while Ukraine’s will fall by 600Kt to a 12-year low of 13.5Mt.

While Canada is expected to pick up some of this lost demand, the overall impact of the changes was to lift the forecast for major exporters’ stocks at the close of 2026/27 by 2.9Mt to 61.6Mt.

That represents the equivalent of 7.5% of world use, 0.4 points above last month’s figure, but below the five-year average of 8.4%.

Corn - EU crop cut to 19-year low. Ukraine exports downgraded too

The USDA in its August Wasde crop report made a marginal upgrade, of 330Kt, in its forecast for this year’s US harvest, raising it to 406.8Mt, a little ahead of expectations.

However, the modest headline revision disguised significant moves in underlying estimates.

The forecast for this year’s US yield was cut by 0.14t/ha, to 11.35t/ha, a bigger downgrade than most traders had expected, after “mixed” July weather.

However, the impact was offset by a larger-than-expected increase, of 1.4M acres to 96.7M acres, in the sowings estimate.

Despite the flat harvest figure, the USDA slashed its forecast for US corn stocks at the end of 2026/27 by 3.5Mt to 42.0Mt, nearly twice the downgrade that analysts had expected.

The revision reflected increases of 1.9Mt to US corn export estimates for both 2025/26 and 2026/27.

The USDA cited “reduced competition from other exporters”, including Ukraine, for which the 2026/27 export estimate was cut by 1.0Mt to 22.0Mt on “expectations of logistical disruptions amid increased Black Sea hostilities”.

The estimate for the EU harvest was cut by 3.6Mt to a 19-year low of 50.2Mt, on “extreme heat and dryness”.

Soybeans - US harvest prospects buoyed by larger-than-expected sowings

The USDA lifted its forecast for US soybean production this year by 1.2Mt to a record 123.0Mt, contrasting with market expectation of a little-changed estimate.

Although the US yield estimate was trimmed by more than had been expected, to below last year’s record high, sowings were pegged at 86.8M acres, 1.4M acres above the previous estimate.

US soybean stocks at the end of 2026/27 were forecast at 8.7Mt, an upgrade of 270Kt, and a little above the number traders had pencilled in.

Global estimates were little changed, leaving the world carryout forecast for 2026/27 at 124.2Mt, in line with last month’s estimate, and market expectations.