USDA in Feb 2022: minor downward revisions to 2021/22 grain supply

USDA slightly cuts global grain supply again In its February 2022 issue, the US Department of Agriculture (USDA) estimated the world grain harvest 2021/22 at 2,273 million t, slightly lower than in the previous month. Global consumption will also be slightly reduced to 2,279 million t. Stocks were reduced again by around 605 million t. The supply figure reaches 26.5% of end stocks (previous year 27.1%) for consumption, without China the stocks fall to 13.9%. The development over several years of a tighter supply situation compared to previous years is confirmed again. At this point in the grain marketing year, the changes to the monthly estimates are only minor. In Brazil , the harvest is estimated to be slightly lower due to La Niña. Minor corrections have been made in some small regions of Asia and Africa. The global supply on the wheat market is measured by the supply figures (o.China) of 21.2% ending inventory to consumption (previous year 22.8%) continues to be low. The wheat exports of the world's largest exporting countries remain below the previous year by -43% (-11 million t) in Canada and by -10% (-4 million t) in Russia . In contrast, rising export volumes are still expected to continue unchanged in the Ukraine (+7 million t) and the EU-27 (+8 million t). On the import side , however, there has been a significant increase from 195 to 205 million tons in the previous year. A pronounced precautionary behavior can be observed. The global corn supply will be reduced again by 1 million t compared to the previous month. Without China, the end stock for consumption is estimated at just under 10% and is only sufficient for around 37 days . In China , the increased corn harvest is estimated unchanged. Imports are said to be around 12% lower than in the previous year and are only estimated at 26 million tonnes.On the Chicago Stock Exchange , the USDA report further amplified the rise in wheat and corn prices. Wheat rises to €255/t and corn to €223.60/t. The courses on the Paris stock exchange followed with a time lag. Wheat is quoted at €263/t for the delivery month Mar-22, while corn quotes changed comparatively little at €250/t. The assessment of the supply situation in the grain marketing year 2021/22 is becoming increasingly narrow. However, with a view to the second corn harvest in Brazil, the last harvests of this year are not yet sealed. Covid-related restrictions in logistics and political decisions can lead to further incidents and bottlenecks, possibly due to the Russia-Ukraine conflict . Added to this are the limited promising prospects for the coming harvest as a result of the global fertilizer shortage and high fertilizer prices.The main influencing factors for the market and price events in FY 2021/22 can be summarized in the following aspects:

• Continued narrowing of the international supply situation
• Doubling of freight costs
• Covid-related impairments in trade
• Increased stock purchases to ensure supply

Only a slight weakening of the aforementioned influencing factors is to be expected for the coming grain marketing year. In addition, there is the aggravating influence of scarce and expensive fertilizers. The futures prices on the stock exchanges signal a persistently high price level: