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A Shock to the Wheat Market

A Shock to the Wheat Market

7/12/2017 12:06:00 PM/Categories: General News, Today's Top 5, Grains, Wheat, Corn, Grain Markets

WASHINGTON (DTN) -- USDA released the monthly World Agricultural Supply and Demand Estimates on Wednesday as well as crop production projections for wheat. The reports also included updated 2017-18 numbers for corn and soybean production and yields.

Wednesday's new U.S. ending stocks estimates were bearish for corn and wheat and bullish for soybeans, said DTN Analyst Todd Hultman. World ending stocks estimates were bearish for corn and wheat and neutral for soybeans, he said.

WHEAT

USDA raised All-Winter Wheat production to 1.279 billion bushels, up 29 million bushels from the June estimate, coming close to the high end of the pre-report estimate. USDA forecasts the winter wheat yield at 49.7 bushels per acre, up 0.8 bushel from the June estimate. Spring wheat came in at 423 million bushels, slightly higher than the pre-report estimate, but down 21% from last year's crop.

Durum production was pegged at 57 million bushels, below the low end of the pre-report estimates and down 45% from a year ago.

The average farm-gage price for wheat was pegged at $4.80 a bushel.

USDA projects farmers will grow more corn and soybeans than earlier anticipated, bumping up 2017-18 corn production to an estimated 14.255 billion bushels and soybean production to 4.26 billion bushels.

CORN

Corn production for 2017-18 was projected at 14.255 billion bushels, which is 190 million bushels higher than last month's production estimate.

Yield was pegged at 170.7 bushels per acre, unchanged from earlier estimates.

USDA raised new-crop beginning stocks by 75 million bushels. USDA raised 2017-18 feed and residual use by 50 million bushels as well, but with the higher production forecast, the 2017-18 ending stocks are estimated at 2.325 billion bushels, up 215 million bushels from earlier forecasts.

The farm-gate price for corn for 2017-18 was projected at an average of $3.30 a bushel, down 10 cents from earlier estimates.

World production was increased by 5 million metric tons and 2017-18 global corn ending stocks were projected at 200.81 mmt, an increase of 6.48 mmt. Global ending stocks were increased based in production and ending stock increases in Vietnam, Mexico and Argentina.

SOYBEANS

Soybean production for 2017-18 was projected at 4.26 billion bushels, a 5-million-bushel increase based on expected increased harvest area. Expected yield was unchanged at 48 bushels per acre.

New-crop beginning stocks were lowered 40 million bushels to 410 million bushels. That lowered total supply for 2017-18 and also lowered ending stocks for new-crop soybeans by 35 million bushels to 460 million bushels.

The farm-gate price for the 2017-18 soybean crop was pegged at an average of $9.40 a bushel, a 10-cent bump from last month's estimate.

Brazil's soybean crop was projected at 114 million metric tons, unchanged from last month. Argentina's soybean crop also was projected at 57.8 million metric tons, also unchanged from June.

Editor's note: Join DTN Senior Analyst Darin Newsom at 12 p.m. CDT Wednesday for an in-depth look at the latest USDA Supply and Demand and Crop Production estimates. 

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