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USDA Trims Soybean Crop, Stocks; Wheat Crop Seen Improving

A smaller soybean crop, a slightly corn crop and a larger wheat crop. That's what USDA officials expect out of the fields this year, if Wednesday's USDA-NASS monthly World Agricultural Supply and Demand Estimates (WASDE) report is any indication.

In terms of grain stocks pegged in Wednesday's report, there's more wheat on hand than earlier expected, more soybeans than expected and about as many bushels as the trade expected heading into Wednesday's data. 

"Corn ending stocks for 2015/16 are projected at 1.7 billion bushels, down 105 million from the 2014/15 projection. The season-average 2015/16 farm price is projected at $3.20 to $3.80 per bushel, down 15 cents at the midpoint from this month’s lowered outlook for 2014/15. Available opportunities for forward pricing the 2015 crop have been at substantially lower levels than the pre-planting bids offered for the 2014 crop," according to Wednesday's WASDE report. "With larger supplies and lower use, U.S. ending stocks for 2015/16 are projected at 500 million bushels, up 150 million from 2014/15. The U.S. season-average soybean price for 2015/16 will decline to $8.25 to $9.75 per bushel compared with $10.05 in 2014/15. Soybean meal prices are forecast at $305 to $345 per short ton compared with $365 in 2014/15. Soybean oil prices are forecast at 29.5 to 32.5 cents per pound compared with 32.0 cents in 2014/15."

The real reason for the double-digit dip in wheat prices immediately after the WASDE and monthly Crop Production reports were released (wheat was down 10 to 11 cents while soybeans and corn were both around 2 cents lower) is in a higher outlook for that crop pegged in the former dataset.

"Winter wheat production is forecast at 1.51 billion bushels, up 2 percent from the May 1 forecast and up 9 percent from 2014. Based on June 1 conditions, the United States yield is forecast at 44.5 bushels per acre, up 1 bushel from last month and up 1.9 bushels from last year," according to Wednesday's Crop Production report. "Hard Red Winter production, at 887 million bushels, is up 4 percent from last month. Soft Red Winter, at 414 million bushels, is down less than one percent from the May forecast. White Winter, at 204 million bushels, is up slightly from last month. Of the White Winter production, 12.4 million bushels are Hard White and 191 million bushels are Soft White."

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