Can Wheat Benefit From Bullish Friday Report?
Grains spent the week dealing with weather and waiting for the supply/demand report on Friday, which would give the market USDA’s first estimates for the 2014/15 crop year.
Most corn and soybean producers had a few days of open weather to work in the fields. Plains wheat farmers finally found some relief from the heat but not near enough rain for most of the region. Crop conditions will likely show another week of declines across most of the hard red winter wheat states.
Rains did reach some areas surrounding the major growing regions, which likely helped the crop in the north. Light rains are forecast for the weekend in most of the Plains, but wheat in Oklahoma and Texas is too far advanced to be helped at this point.
The supply/demand report had plenty of numbers to chew on – both old and new crop. All winter wheat production was estimated at 1.403 billion bushels, about 65 million less than trade expectations, and down 131 from last year. Most of the drop came from soft red where only 447 million bushels are projected, 20 million less than expected and down 118 million from last year. Hard red winter was 36 million less than expected at 746 million, which is almost exactly equal to last year.
USDA was equal to the Kansas crop tour’s number of 260 million for that state, which would be down from last year’s 319 million. Weather hasn’t improved that much for Kansas; in fact, it was brutally hot, dry, and windy just after the tour, and it’s very likely that Kansas production will be even lower than USDA’s estimate.
Montana appears to be the one bright spot for hard red winter wheat with this year’s production estimated up 27% at 103.4 million bushels on an average yield of 44.0 bu/acre, up 1.0 from last year.