By Taylor Ortiz and Eric Oeth

While February 8 USDA WASDE reports were less than thrilling, the team here was beyond exciting for something to focus on so we decided to pick apart a few commodities that still had interesting talking points. Here we go!


The USDA’s reporting on wheat contained a few minor surprises on the global wheat situation – namely, that despite rumors of an imminent slowdown of Russian wheat, the USDA pegged 18/19 wheat exports from Russia a half-million metric tons higher than in December.

The FOB bid for the Black Sea is currently slightly higher than the US HRW 11.5% Gulf bid (see below); whether this translates into increased export business for US wheat – which many have been expecting as Russian supplies become thinner – remains to be seen.

One other minor surprise came from the adjusted export figures as well released today. While the adjusted Russian number isn’t terribly surprising, the fact that 0.7 of the 1.3MMT net increase in estimated global wheat exports for the 18/19 year would be coming from Pakistan, was.

Earlier this week, Pakistan issued a rare tender to export 0.25m tonnes of wheat. As reported in private media and the Grains Report, this export tender could be subsidized by the Pakistani government. Wheat is the main staple in Pakistan, and the government maintains a strong hand in the marketing and trade of the grain. A move towards subsidized exports reflects lessening concerns over inflation and food security in the country.  


The discussion is around corn exports vs. corn usage in the United States. A cooperative told us they are questioning if supply can meet global demand as we see the potential for year-round ethanol blending, improved trade with China, and increased export of corn from Mexico. In addition, in 2018 the EU turned into a net cereal importer for corn for the first time in a decade.

However, within the EU we are keeping our eye on Romania. The World Ag Report published on February 8 highlights Romanian corn as Romania experienced a record yield and now represents 23% of EU corn production.

In 2017-2018, Romania surpassed France as the EU’s largest producer of corn. In addition, this past autumn Swiss-based grain and fertilizer trader Ameropa finished investing and expanding the Chimpex terminal at the Port of Costanta, increasing grain storage by 60%. With Romania having the benefit of the Black Sea, EU policies, and increased technology usage toward yields, it is undoubtedly able to increase its place in global production. Romania may be a thimble in production now, but this is a country worth watching. Besides, currently global corn use is exceeding global supply.


The crop of the year for mainstream news. With focus on Brazil as opposed to China, the World Ag  Report published stated that Brazil soybean production for 2018/19 is estimated at 117.0 mmt down 5mmt or 4% from December and 3% from last year’s record. Harvested area is estimated at 36.1 million hectares, down slightly from December, but up 3% from last year. Our favorite takeaway is the visual the USDA presented on the MODIS Normalized Difference Vegetation Index (NDVI). It demonstrates that vegetation conditions declined in some soybean-growing areas of western Parana, Goias, Mato Grosso du Sul and Mato Grosso. However, in other areas yields are estimated above average.  A majority of Mato Grosso was not affected by drought and received adequate rainfall with yields estimated above average. This caught our eye as we often blanket Brazil as ‘drought land’ these days. This is all available here in case you missed it:


Brazil, riding a wave of higher production, is slated for record-setting exports this marketing year. Amid global demand increases, and China’s building of cotton stocks, the USDA expects Brazilian cotton exports to reach 1.35 MMT in the current marketing year. This figure would be 6.8% higher than December’s export estimate, and almost a 49% increase from the 17/18 marketing year.

Meanwhile, China, the largest producer, and second-largest importer of cotton, is estimated to have a record  year for yields, alongside slightly lower acreage estimates compared to the prior year. Stocks in the country are low, necessitating imports from, primarily, Brazil; tariffs on American cotton and ongoing concerns over the quality of Indian cotton have made Brazil the buyer of choice in recent months, per the Cotton World Markets and Trade report.

A-Index and U.S. cotton spot prices are almost unchanged in the latest report. Trade is pegged 600,000 bales higher from the December report off of, in addition to stock building in China, higher expected imports from Turkey and Pakistan. At the same time, global production is estimated to have declined by about 300,000 bales.

And that’s the news!