Wheat futures surged in the aftermath of the USDA’s initial 2022-23 supply-demand estimates on Thursday. Corn and soybeans also moved higher.
Most of the upward momentum for wheat futures was linked to an 8% fall in expected US winter wheat output compared to last year. The Hard Red Winter production estimate was particularly bullish, with the USDA putting the crop at 590 million bu, down from the government’s April estimate of 749 million and below analysts’ estimates for 685 million. At an estimated 619 million bu, new-crop US wheat ending stocks were projected down 6% from a year earlier and the lowest in nine years. Global ending stocks are expected to decline 5% to the lowest in six years at 267 million tonnes. July Chicago wheat raced up 65 ¾ cents to $11.78 ¾, July Kansas City jumped 69 ½ cents to $12.70 and July Minneapolis was 60 cents higher at $13.16.
Corn gained as the USDA pegged this year’s average yield unexpectedly low. The average yield is seen at 177 bu/acre, steady with a year earlier and 4 bu below the USDA’s estimate in February at the Agricultural Outlook Forum. “The very slow start to this year’s planting in the major corn producing states and the likelihood that progress by mid-May will remain well behind normal reduces yield prospects,” the USDA said. July corn inched up 3 cents to $7.91 ½ and December added 17 ¼ cents to $7.53.
Today’s report was relatively neutral for soybeans, but the market advanced with the gains in corn and wheat. July was up 7 cents at $16.13 ¾ and November was 8 ¼ cents higher at $14.80 ½.
Source: DePutter Publishing Ltd.
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