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Wheat Closes Lower; Corn, Beans End Higher After USDA Reports

Analysts Expected Few Changes in Supply, Demand Report

Wheat futures stayed lower while corn and soybeans closed higher after today's World Agricultural Supply and Demand Estimates (WASDE) and crop production reports. 

Investors were more focused on weather with wheat falling as storms are forecast for spring wheat country in the Northern Plains and Canada. 

“Multiple rain chances through Wednesday for the Northern Plains (and) southern Canada reduce dryness concerns but still slow northwest Canada seeding," Commodity Weather Group said in a report on Friday morning. 

The Department of Agriculture's crop production report also weighed on wheat prices as the government raised its outlook for winter production despite a snowstorm the last week of April that analysts and agronomists had feared hurt the crop. 

Winter wheat production was forecast at 1.25 billion bushels, up slightly from the May 1 forecast but down 25% from 2016, the USDA said. As of June 1, yield was forecast at 48.9 bushels per acre, up modestly from last month but down 6.4 bushels from last year, according to the report. If realized, the yield will be the second highest on record behind only 2016.

Hard-red winter production is pegged at 743 million bushels, up 1% from May's forecast, while soft-red winter output is seen at 298 million, also up 1%, the USDA said.

Larry Glenn, an analyst with Frontier Ag in Quinter, Kan., said the moisture the storm brought did more good than the snow did damage. Parts of Kansas had as much as 24 inches of snow, in some cases snapping stalks on wheat that was beginning to head out, he said. Still, the weather after the snowstorm was ideal for improving yields.

"The idea that rain makes grain outweighed the idea of damaged stalks," Glenn said. "It’s stayed cool, it stayed damp and it was great growing weather. The weather was ideal, so that helped some of the damaged wheat out there."

The USDA WASDE report showed 2016-2017 corn ending stocks at 2.295 billion bushels, just missing estimates for 2.287 billion but unchanged from last month's outlook. For new-crop corn, the USDA estimated inventories at 2.11 billion bushels, on par with the May projection and up from estimates for 2.085 billion. 

Soybean inventories for 2016-2017 were seen at 450 million bushels, higher than estimates for 433 million bushels and May's 435 million. New-crop carryout is forecast at 495 million bushels, topping projections for 485 million. The government last month pegged 2017-2018 stocks at 480 million bushels.

For wheat, carryout was seen by the USDA at 1.16 billion bushels, almost perfectly in line with analyst forecasts and last month's 1.159 billion bushels. For 2017-2018, inventories are seen at 924 million bushels, topping forecasts for 911 million and last month's projection of 914 million bushels. 

Wheat for July delivery declined 3 1/4¢ to $4.46 a bushel on the Chicago Board of Trade. Kansas City futures lost 2 1/4¢ to $4.51 1/2 a bushel. 

Corn futures rose 2 1/4¢ to $3.88 a bushel in Chicago. 

Soybean futures added 3 3/4¢ to $9.41 3/4 a bushel. Soy meal fell 30¢ to $305.80 a short ton, and soy oil gained 0.44¢ to 32.29¢ a pound. 

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