Wheat Prices Rally on Lower U.S. Winter Wheat Production Estimate


USDA trimmed both 2017-18 (old-crop) and 2018-19 (new-crop) corn and soybean ending stocks in its release of June Crop Production and World Agricultural Supply and Demand Estimates (WASDE) this month.

New-crop soybean ending stocks, in particular, came in below pre-report analyst expectations, at 385 million bushels, down 30 million bushels from the May report. Old-crop corn ending stocks also came in lower than expected, at 2.1 billion bushels, down 80 million bushels from May.

USDA actually increased the U.S. winter wheat production estimate above the average pre-report analyst projection. The agency expects growers to produce 1.198 billion bushels of winter wheat in 2018-19, up 1{665a3d7248b9690333c4195c142b942e2311c5bd36bcf4da0d19dbcb5cbdf347} from the May report, with an average yield of 48.4 bushels per acre, up from 48.1 bpa in May.

The agency left production and yield estimates for 2018-19 corn and soybean crop untouched from the May report.

USDA released its Crop Production and WASDE reports for the month of June on Tuesday.

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

Crop Production: https://www.nass.usda.gov/…

World Agricultural Supply and Demand Estimates (WASDE): http://www.usda.gov/…


Corn production for 2018-19 remained at 14.040 billion bushels, with an average yield of 174 bpa.

New-crop (2018-19) corn ending stocks were 1.577 billion bushels, down 105 million bushels from May, based mostly on increased use for food, seed and ethanol.

USDA pegged the average farmgate price for corn at $3.40 per bushel.

In South America, Brazil's corn production was trimmed 2 million metric tons (mmt) from the May report to 85 mmt (3.3 billion bushels). Argentina's corn production stayed the same at 33 mmt (1.3 billion bushels).

Global new-crop ending stocks for corn were trimmed to 154.7 mmt, and old-crop ending stocks also dropped to 192.7 mmt.


Soybean production and yield remained the same, at 4.280 billion bushels and 48.5 bpa.

Domestic old-crop soybean ending stocks were 505 million bushels, down 25 million bushels from the May report.

The average soybean farmgate price was pegged at $8.75 per bushel.

In South America, Brazil's soybean production was bumped up 2 mmt, to 119 mmt (4.4 billion bushels). Argentina's soybean production was trimmed 2 mmt, to 37 mmt (1.4 billion bushels).

Globally, soybean new-crop ending stocks were increased slightly to 87 mmt, and old-crop ending stocks also increased marginally to 92.5 mmt.


USDA expects U.S. farmers to grow 1.827 billion bushels of wheat in 2018-19. Of that, 1.2 billion bushels are expected to be winter wheat, down 6{665a3d7248b9690333c4195c142b942e2311c5bd36bcf4da0d19dbcb5cbdf347} from last year. The agency pegged average yield at 48.4 bpa, down from 50.2 bpa last year.

Hard red winter production was estimated to reach 650 million bushels, also above the pre-report average estimate, but down 100 million bushels from 2017. Soft red winter production was pegged at 316 million bushels, up slightly from May.

White winter wheat is expected to reach 232 million bushels, up 2{665a3d7248b9690333c4195c142b942e2311c5bd36bcf4da0d19dbcb5cbdf347} from May. Of those bushels, 21.8 million are hard white and 210 million bushels are soft white.

The average farmgate price for wheat was pegged at $4.60 per bushel.

Source: DTN

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