Chicago wheat rallies after friendly USDA news, but other wheat markets fall.

In its first survey-based estimates for 2020, the USDA pegged this year's US winter wheat crop at 1.22 billion bu, down from about 1.27 billion bu in June and down from 1.30 billion bu last year.

The smaller total wheat production and winter wheat forecast from last month was because of cuts in Soft Red Winter and Hard Red Winter.

For HRW, which is mainly grown in the US Plains, with Kansas being the largest production state, the forecast is now 710 million bu. That’s down sharply from 833 million in 2019. Harvesting of the HRW crop is moving forward quickly at this time.

This estimate was within trade expectations.

Soft Red Winter was reduced slightly from a month ago, to 280 million bu, from 297 million last month. This is still up from the relatively small crop of 239 million bu in 2019. Harvesting of the SRW crop is finishing up in some of the southern growing areas and continuing in around the Great Lakes states of Ohio, Indiana and Michigan, and is underway in southern Ontario.

The Soft Red estimate was below most trade expectations.  

Hard Red Spring wheat was forecast at 550 million bu, down slightly from 562 million last year, as expected.

The crop of durum came in at 56 million bu, up very slightly from 54 million bu last year, also in line with trade expectations.

Despite the downward revisions in total wheat production, supplies are far from short. The 2020-21 US all-wheat ending stocks forecast is at a plentiful 942 million bu, down only slightly from 1.04 billion bu in the 2019-20 marketing year.

Soft Red Winter wheat supplies ahead of harvest were very slim. Now, with the harvest below trade expectations and down from the previous forecast in June, the Chicago Soft Red Winter futures market bounded higher after the news. The CBT SRW Sept future rallied 9 cents to US$5.34.

On the other hand, the Sept HRW futures contract was down 4 ¾ at $4.52.

The Sept Minneapolis HRS futures came back from early-session losses to settle the day up ¼ cent at US $5.26 ¼.

Source: DePutter Publishing Ltd.

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