WASDE comes with a bang for wheat
July’s WASDE report took the wheat market by surprise as the USDA has raised US production estimates by 2 million mt to 47.2 million mt despite the drought recently witnessed in the Midwest. By contrast USDA revised the global production estimate downwards by 3.5 million mt to 796.7 million mt. Issue is that drought will reduce output by 2.5 million mt in the EU (138 million mt) and by 2 million mt in Canada. Production will also range 2 million mt lower in Argentina (17.5 million mt) due to reductions in acreage.