Wheat prices suffered double-digit losses on the Chicago Board of Trade on Friday after the USDA released its June World Agricultural Supply and Demand Estimates Report. The USDA raised the estimate for 2016/17 ending stocks to 1.05 billion bushels, the largest in almost 30 years. With the Great Plains in the U.S. experiencing excellent growing conditions, the agency is projecting record high winter wheat yields. Ending stocks for corn and soybeans were lowered, due in part to reduced production in South America.
Here are some of the highlights of the June 10 WASDE report:
Wheat: Projected U.S. wheat supplies for 2016/17 are raised this month on both increased beginning stocks and larger winter wheat production. Beginning stocks are raised slightly with a 3-million-bushel decrease in 2015/16 imports partially offsetting a 5-million-bushel export reduction. Projected production for 2016/17 is up 79 million bushels mainly on improved prospects for the Hard Red Winter wheat crop in the Great Plains following excellent growing conditions throughout the spring months. Consequently, the winter wheat yield is forecast to be a record high. Feed and residual use for 2016/17 is raised 30 million bushels to 200 million on the larger crop as well as increased wheat price competitiveness with corn. Imports are lowered 5 million bushels, and exports are raised 25 million bushels to 900 million, up significantly from the previous year’s depressed total but still below the five year-average. Ending stocks are raised 21 million bushels to 1.05 billion, the largest in 29 years.
Corn: Projected corn production for 2016/17 is unchanged at a record 14.4 billion bushels. Corn ending stocks for 2015/16 are reduced 95 million bushels as a 100-million bushel increase in the corn export forecast more than offsets a slightly higher import projection. As of early June, total U.S. corn export commitments (accumulated exports plus outstanding sales) are above year-ago levels for the first time in the 2015/16 marketing year. Reduced corn production in Brazil and harvest delays in Argentina have improved the relative competitiveness of U.S. corn in recent weeks. The U.S. corn export projection for 2016/17 is raised 50 million bushels as U.S. supplies are expected to remain more competitive in 2016/17 with less production for Brazil. Corn ending stocks for 2016/17 are projected at 2.008 billion bushels, down 145 million from last month.
Soybeans: This month’s U.S. soybean supply and use projections for 2016/17 include lower beginning stocks, higher exports, and lower ending stocks. Lower beginning stocks in 2016/17 reflect higher crush and export projections for 2015/16. Soybean crush for 2015/16 is raised 10 million bushels to 1.89 billion, reflecting an increase in projected soybean meal exports. Soybean meal exports are raised in part on commitments through early June.
Soybean exports for 2015/16 are projected at 1.76 billion bushels, up 20 million with reduced soybean production and exports for Brazil and Uruguay. Soybean ending stocks for 2015/16 are projected at 370 million bushels, down 30 million from last month. Ending stocks for 2016/17 are reduced 45 million bushels to 260 million on lower beginning stocks and increased exports. Exports are raised with reductions for Brazil and Ukraine.
Changes for 2015/16 include reduced soybean production for Brazil, Uruguay, and China. The Brazil soybean crop is reduced 2.0 million tons to 97.0 million reflecting the latest crop production report from the Government of Brazil. Hot, dry conditions in parts of the Center-West and northeast resulted in reduced yields. With a lower soybean production estimate, Brazil October-September year exports and stocks are reduced for both 2015/16 and 2016/17.