WASHINGTON, D.C. (RFD NEWS) — The markets are preparing for Friday’s World Agricultural Supply and Demand Estimates (WASDE) report, with analysts closely watching updates from the U.S. Department of Agriculture (USDA) on global crop production, soybean exports, and trade developments.
USDA’s World Agricultural Outlook Board Chair Mark Jekanowski says this is a critical time of year for crop production in both the Northern and Southern Hemispheres, and the agency is monitoring harvest progress and production forecasts in major grain-producing regions worldwide.
“This is an important time of the year generally for agricultural production,” he explained. “Across the Northern Hemisphere, we’re tracking wheat harvests and incorporating the latest forecasts and harvest projections worldwide, all of the major producers — EU, Black Sea region, U.S., of course. And then in the Southern Hemisphere, we’re kind of right in the middle of an important time for the Brazil second-crop corn harvest. That’s a major source of global corn supply. So we’re tracking that pretty closely as well.”
The July WASDE report will be released Friday at 12 PM ET. Jekanowski said the next major USDA report will come next month, when the department releases its initial survey-based yield estimates.
Market Eyes China Demand, Weather & Shifting World Trade Dynamics
Analysts are also keeping a close eye on the soybean market after the USDA confirmed a large sale of U.S. soybeans to China.
Darin Newsom, senior market analyst at Barchart, said weather in the flyover states is one of the key factors in focus.
“That it’s going to stay hot over much of the U.S. Midwest and Plains, not just this week, but even with the 30-day outlook — and we even know 30-day outlooks are a little bit difficult to pinpoint,” Newsom told RFD News. “So, we’re going to see a normal summer season, but just with a little extra heat added in, and the question mark being precipitation.”
Traders will also be watching for additional Chinese purchases, which will likely determine whether the recent rally in soybeans continues.
“On the China front, you know, the degree of the rally that we saw certainly indicated that there was more than weather behind it, sort of thing, and it usually means China is doing some buying — and that seems to be the case,” he continued. “There was talk yesterday of five to six cargoes being sold to China. This morning we got the confirmation of that, and now everyone’s going to be all excited about it. But again, is it going to be a case of ‘buy the rumor, sell the fact?’ You know, it’s still just secondary supplies.”
USDA’s flash sale totaled nearly 472,000 metric tons, marking the largest daily soybean sale in months. Analysts say the market’s next move could depend on whether additional export sales materialize and how weather develops across the U.S. growing region.
As export sales and trade negotiations continue, some market observers believe the global trading system itself is changing.
Jeremy Zwinger of Farm and Trade said the World Trade Organization (WTO) no longer has the same influence it once did, resulting in more trade agreements being negotiated directly between individual countries.
“The WTO is basically dead, and that is a huge change that people don’t realize now,” he said. “You can complain all you want about what countries are doing, but when you can’t enforce any trade agreement other than a unilateral one-to-one. You know why Trump is pulling out of the USMCA? I mean, you see, try to get a better deal and make one-on-one agreements with Mexico and Canada. But this WTO thing is a huge, huge issue because, you know, China agreements, India agreements, nothing matters anymore unless you can come out with a big stick because the paper isn’t worth what it was written on, you know, five, ten years ago.”
The World Trade Organization operates by consensus, with members generally required to reach agreement on major decisions before they can be adopted.
