Wheat

Mid-January saw the release of much-anticipated information from the USDA in the form of world supply and demand estimates, US winter wheat plantings, final 2012 production estimates and quarterly stocks. The news gave some support to US grain prices, but did not deliver the usual associated level of volatility, with daily price limits going untested.

USDA left US wheat production unchanged at 61.76m t, but increased its estimates of wheat used for feed by almost 1m t to 9.53m t. On the back of weak exports, US wheat prices have been forced lower recently. As well as increasing export competitiveness, the price spread between US wheat and maize has narrowed, stimulating feed demand for wheat. US winter wheat plantings are estimated at almost 17m ha, slightly up on last year and the highest since 2009, but still historically low.

For maize, despite a slight rise in USDA’s US production estimate, feed demand is seen almost 8m t higher than previously, suggesting demand rationing due to high prices has been less pronounced than expected.