Wheat Production Lowered In Latest USDA World Agricultural Supply And Demand Estimates ReportFri, 10 Jul 2020 16:39:56 CDT
The latest World Agricultural Supply and Demand Estimates (WASDE) report came in Friday about as trade experts expected said Rich Nelson, chief strategist at Allendale Inc. Nelson spoke with Radio Oklahoma Agriculture Network Associate Farm Director and Editor KC Sheperd following release of that report.
Nelson said the one area that did stand out was wheat.
Wheat production fell more than expected, he said.
Total wheat production for 2020/21 is reduced 53 million bushels to 1,824 million. Winter wheat production is lowered 48 million bushels to 1,218 million with reductions in Hard Red Winter and Soft Red Winter.
The USDA report indicated the 2020/21 U.S. corn outlook is for sharply lower supplies, reduced feed and residual use, increased food, seed, and industrial use, and lower ending stocks. Corn beginning stocks are raised 145 million bushels, based on lower use forecasts for 2019/20.
U.S. corn production is forecast 995 million bushels lower based on reduced planted and harvested areas from the June 30 Acreage report. The national average corn yield is unchanged at 178.5 bushels per acre.
Soybean production is projected at 4.14 billion bushels, up 10 million on increased harvested area. Harvested area, forecast at 83.0 million acres in the June 30 Acreage report, is up 0.2 million from last month. The soybean yield forecast is unchanged at 49.8 bushels per acre.
The acreage number itself gave a good size decline in production, Nelson said.
Nelson said one thing to keep in mind in coming months is what adjustments in demand will need to be made if the economy continues to struggle.
There are some discounts plugged in already, Nelson said, but there may need to be larger adjustments.
Overall, Nelson said the market has already adjusted for the numbers and the long-term downside for the December contract is $2.85.
For soybeans, the numbers are not bearish, Nelson said. We see maybe an $8.95-$9 November contract.
For the short term, the market focus will be more on the weather impacts.
To view the USDA WASDE report, click here.
To listen to more of KCís interview with Nelson, click on the listen bar below.
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