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Russia-Ukraine War Factors into March WASDE Report

Projected 2021/22 ending wheat stocks are 23% lower than last year

2 Lisa Selfie December 2020 Headshot

Russia’s recent military action in Ukraine significantly increased the uncertainty of agricultural supply and demand conditions in the region and globally.

USDA's March WASDE represents an initial assessment of the short-term impacts as a result of this action.

WHEAT: The 2021/22 U.S. wheat supply and demand outlook is for lower supplies, unchanged domestic use, reduced exports, and higher ending stocks.

Supplies are lower because imports are reduced 5 million bushels, all for Hard Red Spring wheat, on a slower than-expected pace.

Exports are reduced 10 million bushels, down to 800 million, on weaker than expected sales a and shipments for Hard Red Winter and Soft Red Winter.

Projected 2021/22 ending stocks are raised 5 million bushels to 653 million but are still 23% lower than last year.

The 2021/22 global outlook this month is for higher production, decreased trade and consumption, and larger ending stocks. Global output is raised mainly on an increase for Australia, where an updated ABARES estimate raised production 2.3 million tons to a record 36.3 million.

World exports are lowered by 3.6 million tons to 203.1 million, as decreases for Ukraine and Russia are only partly offset by increases for Australia and India.

Exports are lowered for Ukraine by 4.0 million tons to 20.0 million, as the conflict in that country is expected to disrupt exports from the Black Sea region.

Russia exports are reduced 3.0 million tons to 32.0 million as vessel transportation is expected to be constrained by the conflict and the imposition of economic sanctions. Partly offsetting these reductions are increases for 2021/22 Australian and Indian exports, up 2.0 and 1.5 million tons respectively to 27.5 and 8.5 million.

Increased production and competitive prices are expected to boost exports in Australia to a record level. India’s robust export pace is expected to continue because of its ample stocks and rising global prices.

Imports are lowered for many countries including Turkey, Egypt, the EU, Afghanistan, Algeria, Kenya, Pakistan, Tanzania, and Yemen based on reduced Black Sea wheat export availability and higher world prices.

The 2021/22 global use forecast is lowered 0.8 million tons to 787.3 million, on slight decreases in many countries, including India, that more than offset increased feed and residual forecasts for Australia and Ukraine.

Global ending stocks are raised 3.3 million tons to 281.5 million, as increased stocks in Russia and Ukraine are only partly offset by declines in Turkey, India, and the EU.

COARSE GRAINS: This month’s 2021/22 U.S. corn supply and use outlook is for increased food, seed, and industrial use, larger exports, and smaller stocks relative to last month. Corn used for ethanol is raised 25 million bushels to 5.350 billion, based on data through January from the Grain Crushings and Co-Products

Production report and weekly ethanol production data as reported by the Energy Information Administration for the month of February. Exports are raised 75 million bushels to 2.500 billion, reflecting expectations of sharply lower exports from Ukraine. The projected season-average farm price is raised 20 cents to $5.65 per bushel.

Global coarse grain production for 2021/22 is forecast 1.5 million tons higher to 1,498.9 million. This month’s foreign coarse grain outlook is for larger production, lower trade, and greater ending stocks relative to last month.

Foreign corn production is forecast modestly higher with increases for India and Russia that are partly offset by declines for Argentina and South Africa. India corn production is higher with increases to both area and yield.

Argentina corn production is lowered as higher indicated area is more than offset by a reduction in yield. South Africa corn production is down reflecting lower yield prospects.

Corn exports are raised for the United States and India but reduced for Ukraine. Imports are lowered for Egypt, Algeria, Turkey, Israel, India, and Bangladesh. Barley exports are raised for Australia and Canada but reduced for Ukraine.

Foreign corn ending stocks are higher, mostly reflecting increases for Ukraine, India, and Russia that are partly offset by reductions for Argentina, South Africa, and Bangladesh. Global corn ending stocks, at 301.0 million tons, are down 1.3 million from last month.

OILSEEDS: U.S. soybean supply and use changes for 2021/22 include higher exports and lower ending stocks compared with last month’s report. Soybean exports are raised 40 million bushels to 2.09 billion with lower production and reduced exports for South America.

Soybean ending stocks are projected at 285 million bushels, down 40 million from last month. With rising soybean oil prices, soybean oil used for biofuel is reduced this month.

Soybean oil exports are raised in response to reduced global sunflower seed oil trade and tighter global vegetable oil supplies.

Soybean and product prices are all raised this month. The U.S. season-average soybean price for 2021/22 is forecast at $13.25 per bushel, up 25 cents. The soybean meal price is forecast at $420 per short ton, up 10 dollars. The soybean oil price is raised 2 cents to 68.0 cents per pound.

Global 2021/22 soybean supply and demand forecasts include lower production, crush, exports, and stocks. Global soybean production is reduced 10.1 million tons to 353.8 million.

Brazil’s crop is lowered 7.0 million tons to 127 million, Argentina is lowered 1.5 million tons to 43.5 million, Paraguay is lowered 1.0 million tons to 5.3 million, and Uruguay is lowered 0.6 million to 2.0 million.

While global soybean crush is lowered 5.0 million tons on a slower than-expected crush pace for China and lower South American supplies, sunflower seed crush is reduced another 2.2 million mainly for Ukraine.

Major markets impacted by lower Ukrainian sunflower seed crush and product exports include India and the EU. Lower sunflower product supplies in these markets are partly offset by higher soybean oil imports for India and rapeseed imports for the EU.

Tighter oilseed supplies and high oilseed meal and vegetable oil prices reduce forecasts for global demand growth. Global 2021/22 soybean trade is reduced 6.4 million tons to 158.6 million, with lower exports for South America that are partly offset by higher U.S. exports.

Imports for China are reduced 3 million tons to 94 million. Other markets with lower imports include Russia, Bangladesh, Egypt, the EU, Pakistan, Argentina, and Belarus.

Global soybean stocks are lowered 2.9 million tons to 90.0 million, the lowest level since 2015/16.

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