USDA’s latest WASDE report bearish for wheat
The U.S. Department of Agriculture released its long-awaited November crop production and World Agriculture Supply and Demand Estimate reports.
Most of the focus was on the soybean and corn crop estimates.
The changes to U.S. wheat production were anticipated because they were released in the 2025 Small Grains report, in which production was increased to 1.99 billion bushels with overall yields increasing by 0.6 bu. per acre to 53.5 bu. per acre.
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The USDA’s ending stocks estimate with the larger production numbers jumped by 67 million bu. to 901 million bu.
The big changes came from the WASDE report’s very bearish international outlook for wheat.
World wheat production was increased in the November report with USDA projecting a new record of 829 million tonnes. This was up by 13 million tonnes from the last estimate in September.
The major exporting nations accounted for most of the increase with production rising by 13.2 million tonnes from September.
Russian wheat production was increased by 2.9 million tonnes while Argentine output was raised by 2.5 million tonnes. Every major wheat exporter’s production was increased during the report except for Ukraine.
On the wheat use side of the ledger, the USDA did increase the exports from the major exporting countries by 2.5 million tonnes. Domestic consumption was also raised by three million tonnes. The smaller increase in major exporter demand caused the ending stocks projection to rise significantly.
Major exporter wheat ending stocks increased by 6.375 million tonnes, which equates to 62.9 days of supply. This is the largest stocks-to-use level since the 2018-19 crop year.
Increased stocks in the major exporters will be negative for wheat prices over the next few months
The USDA estimates indicate that competition between exporters is expected to be strong through the remainder of the 2025-26 marketing year. A sign of this increased competition was a recent sale of 58,000 tonnes of wheat to Mexico from Russia.
Southern Hemisphere production was increased by four million tonnes in the report.
Harvest is underway in Australia and Argentina, and exports from both countries will gain momentum over the next two months. This will keep a lid on wheat prices into the 2026 calendar year.
Wheat prices have been disappointing this year, but there have been positive signs in the cash markets on the Prairies.
Cash prices in Western Canada are approaching the levels last year in mid-November. The reason for the strong prices has been record demand for Canadian wheat exports.
Wheat exports to the end of week 14 was 6.18 million tonnes, which is 700,800 tonnes above last year at this time.
The strong export demand should support prices in the face of the bearish fundamentals of the international wheat market.
Source: producer.com