Corn, Wheat Production Expected to Decline This Year

BY DAN GRANT

USDA predicts corn and wheat production will decline this year due to fewer acres and lower yields, as many traders expected.

But the Ag Department threw the trade a curveball as it predicted increased soybean production would be partly offset by strong demand, which left an ending stocks estimate (480 million bushels) well below trade expectations.

“If there was a surprise (in USDA’s monthly crop supply and demand report), it came in soybeans,” Mike Krueger, market analyst with The Money Farm, said during a teleconference hosted by the Minneapolis Grain Exchange.

“Ending stocks numbers generally came in below the range of trade estimates,” he noted. “This (soybean) market doesn’t look as bearish as it did a month ago.”

USDA pegged ending stocks of corn for 2017-18 at 2.1 billion bushels, down 185 million bushels. Meanwhile, many traders looked for ending stocks of beans to climb well above 500 million bushels, rather than 480 million predicted by USDA.

On the production side, USDA estimates farmers this year will harvest 14.06 billion bushels of corn (down from a record 15.14 billion last year), 4.25 billion bushels of beans (down 52 million bushels from last year’s record crop) and 1.82 billion bushels of all wheat, down nearly 500 million bushels.

National yield averages came in at 170.7 bushels per acre for corn and 48 bushels for soybeans, both down about 4 bushels from last year, and 47.2 bushels per acre for all wheat, down 10 percent from last year’s record.

USDA made the yield estimates based on weather-adjusted trends, assuming normal planting progress and summer weather.