Choppy wheat trading
Wheat gapped lower on Monday following the lead of corn, which looks to have an open window for planting next week. Wheat then managed to stabilize for a few days, finding a strong rally on Thursday only to give it all back on Friday.
USDA’s crop report came in about as expected, and with corn under pressure on the improved planting prospects, wheat just couldn’t find enough support to hold its gains. The U.S. dollar surging higher also added pressure to the entire grain complex.
A look at the crop report showed old-crop end stocks for wheat were left unchanged at 731 million bushels. Corn stocks were increased just 2 to 759 million bushels, and soybeans left unchanged at 125 million bushels.
Wheat production was projected to be 2.057 billion bushels, down 212 million from last year. All winter wheat was estimated to be 1.486 billion bushels, down 159 million from last year. Hard red winter wheat was estimated to be 768 million, down 236 million from last year; soft red at 501 was up 81 over last year, and white winter at 217 million was down 5. New-crop end stocks were pegged at 670 million down 61 million from last year.
Corn production was estimated to be 14.14 billion, up 3.36 billion over last year; new-crop end stocks were pegged at 2.004 billion bushels, up 1.245 billion from last year. Soybean production was estimated at 3.39 billion, up 375 million over last year; new-crop ending stocks were estimated at 265 million, up 140 million from last year.
World wheat production for 2013/14 was increased by 46 MMT to 701 MMT, and end stocks were estimated at 186 MMT, up 6 from 2012/13. USDA kept Black Sea production high despite the increasing weather problems being reported from there. Russian and Ukrainian wheat production was projected to rebound after last year’s poor season with Russia producing 56 MMT (up 28 from last year) and Ukraine producing 22 MMT (up 6 from last year). Those numbers will likely be the highest we see this year.
While the report was basically neutral, the markets were already under pressure before its release from improving weather and a strong dollar, and prices continued to flounder throughout the day.