What is a WASDE Report?

WASDE report is the “World Agricultural Supply and Demand Estimates” report prepared monthly by the US Department of Agriculture (USDA). It provides analysis and estimates on agricultural commodities. The report includes annual forecasts for the supply and demand of wheat, rice, coarse grains, oilseeds, and cotton –in the world and in the United States. US supply and use of sugar, milk, egg and meat; and Mexico supply of sugar are also included in the report. Starting stocks, imports and production data are presented regarding supply; and domestic use, exports and closing stocks data are presented in terms of demand.

Why is the WASDE Report Important?

Making sound decisions in the agricultural sector necessitates following the constantly changing supply and demand balances of the commodities. For example, if a large supply (e.g.: agricultural yield) is expected in a commodity; but its domestic and foreign demand is low, then its prices may also be expected to be low. In the opposite scenario, if the supply is low but demand is high, an increase in prices can be expected. Investors and traders can implement different strategies according to the expected fluctuations in the market.

Therefore, accurate estimates regarding supply and pricing are of strategic importance for both producers and consumers, especially in issues such as stock management and production planning. The information on the global agricultural market presented in the WASDE report, and the global production, consumption, stock and export data affecting commodity prices are extremely valuable in this respect.

What Purpose Does the WASDE Report Serve?

The WASDE report is used for market analysis, risk management, policy making, supply chain planning and investment decisions. Since supply and demand changes directly affect product prices, both traders and analysts can make predictions about future price movements by using this report. They can secure themselves against possible market fluctuations with futures contracts or other financial instruments by understanding global production estimates and stock levels. Governments and international organizations can implement agricultural policies, import-export plans and other decisions related to agriculture according to information provided in the report. Textile companies can benefit from the cotton analyses in the WASDE report for cotton supply, inventory management and production planning. Investors can also refer to this report for market assessment and investment opportunities of agricultural commodities.