Home Indiana Agriculture News Corn and Wheat Pop on June WASDE Report

Corn and Wheat Pop on June WASDE Report



The USDA June supply and demand report released in the middle of trading Tuesday was a boon to the corn and wheat markets. Chicago wheat futures traded twenty cents higher and the corn market saw ten cent gains. Even with the agency raising US winter wheat production, the market moved higher, finding strength from lowered Russian and European production, a surprise according to INTL FC Stone’s Arlan Suderman.

“I think that had to be one of the surprise market responses to see how wheat exploded higher when you took the initial look at the USDA numbers,” he told HAT. “It really goes back to what USDA did with the Black Sea production. We’ve been watching this drought developing in parts of eastern Europe, the Baltic regions stretching into the Black Sea region and impacting wheat yields in that area. I don’t think the trade expected that big of a downward adjustment in this report.”

The corn market’s very good day was attributable to lower U.S. ending stocks and a rise in corn exports.

“We’re headed in the right direction but all’s not going to be rosy from this point forward. I’ve talked before about how I’m very optimistic about the longer-term corn picture, but before we can get there, much of that is based on the demand that we see building in China. They have to use up the reserves and I think USDA is understating the size of those reserves by a hundred million metric tons or so. We’re moving through those reserves at a very fast pace.”

More specifically in the report, USDA lowered 2017/2018 ending stocks for corn and soybeans in the monthly World Agriculture Supply and Demand Estimates. USDA reduced ending stocks for corn 105 million bushels to 1.57 billion bushels, which if reached, would be the lowest level since 2013/2014. The season-average farm price is raised ten cents at the midpoint with a range of $3.40 to $4.40 per bushel. Ending stocks for 2018/2019 are projected at 385 million bushels, down 30 million from last month. Price forecasts for 2018/2019 are unchanged this month. The 2018/2019 season-average price for soybeans is forecast at $8.75 to $11.25 per bushel. Wheat supplies are increased slightly this month on higher beginning stocks and production. Winter wheat is forecast up six million bushels to 1.19 million with modest increases in all winter wheat classes and total wheat production is now at 1.82 million. The projected season-average farm price is up $0.10 per bushel with the midpoint at $5.10, compared to the revised 2017/2018 price of $4.75.