US Department of Agriculture suggests trends in the world's principal grain and oilseed crops look promising. The department released its February report on Friday evening (8 February).

The USDA suggested that a 1Mt increase in Brazilian soy production would offset declines in Argentina, meaning South America remains on track for a record crop. Although Brazilian production remains within range forecast by analysts at government agency CONAB (83.4Mt), Argentine production continues to suffer from the effects of drought, although rain had been forecast to fall over the weekend. USDA said the news has given hope for the United States, where supplies are tight following the ongoing effects of drought.

US soyabean crush was increased slightly while exports were left unchanged, leaving US ending stocks even tighter at 3.4Mt or 4 percent stocks-to-use ratio. Overall, production increases worldwide, which continued above the rate of increased demand, led to a slight increase in world soyabean ending stocks 2012, which stand at an estimated 60.12Mt.

Maize ending stocks enjoyed a larger increase, rising from 2.05Mt to 118.0Mt due to production increases in the US, Brazil and Mexico. Demand for maize was down in the feed sector, largely due to lower usage in Brazil, though some of this reduction was absorbed by higher use in feed in the EU.

In contrast to other staples, wheat ending stocks were left virtually unchanged at 176.73Mt, up slightly from their January levels. USDA said a slight increase in opening stocks made up for higher use in feed and drops in production.

In the US, wheat end-stocks fell on higher use of the grain in feed; wheat remains cheaper than maize, though rallies in the summer saw both grains reach record high prices. Again, conversely to the US and other powers, use of wheat in feed in the EU dropped off slightly.

In the Former Soviet Union states, higher Ukrainian opening stocks and improved production clashed with reduced production in Kazakhstan. The region was hit by severe drought last season.