(Bloomberg) – Not only soy accuses the impact of China. The world's largest consumer of basic products has also shaken the markets for corn and wheat.
On Thursday, the US Department of Agriculture (USDA) unveiled major changes in its global cereal stock figures after China adjusted its production statistics for the most important agricultural products over the past ten years. . The prices of maize and wheat fluctuated strongly after the publication of monthly estimates of worldwide demand for and supply of agricultural products in the country.
The USDA almost doubled its estimate for the cereals of the world and increased the forecast for wheat stocks by 2.5 percent. Add to that a staggering increase in US soy stocks, while President Donald Trump's trade war with China suppresses the demand for American supplies. Although the prices of maize initially decreased, they recovered when soya remained lower.
"China is not a problem, they do not export those shares, nobody knows their quality and they are not yet a major importer of corn," said Michael Magdovitz, analyst at Rabobank International Ltd. in London. "The one who determines prices is the export market."
Some key points of the USDA report on supply and demand on the world market are: global grain stocks are now expected at 307.5 million tonnes at the end of the season, compared to the projection of 159.6 million tonnes made in October . The increase was equivalent to finding 40 percent of US production. in Chinese silos, said Dan Murray, grain analyst at JSG Commodities.
The USDA established global stocks of wheat at 266.7 million tonnes, higher than the highest estimate in a survey by Bloomberg analysts. While inventories are still lower than a year ago, there is still too much global supply and there is not enough demand to consume inventory, said Brian Hoops, a market analyst at Midwest Market Solutions in Springfield, Missouri.
Changes related to the US trade war and China were also reflected in this month's report. The USDA increased its outlook for soy stocks in the United States to 955 million bushels, exceeding the average analyst forecast of 906 million.
China is the world's largest buyer of soybeans and its rates on American crops. They have turned off the demand for American supplies. Up to now, many traders have felt that the USDA calculations did not accurately record what really happened, as Chinese purchases were exhausted. The latest figures can serve as a realistic bath for the market, because the agency lowers its prospects for American exports.
After the first shock of the doubling of world maize stocks, the market was "reoriented" on other factors, including a reduction in US interest rates. and the possibility of a new cut in January, said Jim Gerlach, president of A / C Trading in Fowler, Indiana.
Original comment: it is not just soya beans! Also China Roils Corn and Wheat Markets
– With the collaboration of Fabiana Batista, Megan Durisin and Dominic Carey.
Reporters in the original story: Isis Almeida in Chicago, email@example.com, Shruti Date Singh in Chicago, firstname.lastname@example.org, Jen Skerritt in Winnipeg, email@example.com
Editors responsible for the original note: James Attwood, firstname.lastname@example.org, Millie Munshi, Patrick McKiernan
For more articles like this, visit us at bloomberg.com
© 2018 Bloomberg L.P.