August WASDE report Black Sea commentary

USDA has just released the new WASDE report, here’s our quick commentary

Wheat:

Russia’s crop 78 mmt (+1.5 mmt),  exports at 37.5 mmt (+1.5 mmt) (ex.Crimea)

Ukraine’s crop 27 mmt (+0.5 mmt), exports at 18 mmt (+0.5 mmt) (inc.Crimea)

Corn:

Russia 15.3 mmt (0 mmt), exports at 4.4 mmt (0 mmt) (ex.Crimea)

Ukraine 39.5 mmt (+0.5 mmt), exports at 33.5 mmt (+0.5 mmt) (inc.Crimea)

The biggest surprise is a small revision of the Russian wheat crop, only +1.5 MMT (we expected +3 MMT or more). The higher area is reflected in their forecast now, spring wheat yield is down 0.04 to 1.65 mt/ha (looks more or less reasonable) but winter yield is marginally down too, by 0.01 to 3.58 mt/ha (this is very strange taking into account high/record-high yields in the Center and the Volga).

Our August wheat crop forecast for Russia it 80.9 MMT, inc. Crimea which harvested around 0.7 MMT, corn – 13.6 MMT.

Our July estimates for Ukraine: 26.4 MMT wheat and 38.3 MMT corn (ex. Crimea).

Neutral/slightly bearish wheat in our view.
 

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