The July edition of the USDA report, which was released on Wednesday, has a negative impact on the market for all commodities. Despite the losses in wheat.
U.S. ending wheat stocks were expected to drop from 924 million bushels to 867 million, but the Agriculture Department actually increased them to 938 million. The USDA lowered its 2017/18 total wheat crop estimate from 1.824 to 1.760 million bushels, while raising its 2017/18 winter wheat crop estimate from 1.250 to 1.279 million bushels.
Drought continues
But the focus was mainly on spring wheat, because this started the positive trend. Weather problems have caused losses in both spring and winter wheat. The remaining winter wheat is showing a reasonable yield with good protein levels, but spring wheat production is at its lowest level since 2002 due to the scorching heat and little precipitation. The harvest is estimated at 423 million bushels compared to 493 million in 2016. The export sales of American wheat are estimated at between 300.000 and 500.000 tons. The weather in the northern American Plains will remain hot and dry for the next 2 weeks. Still, the CBoT turns red with a closing price of $535,50 per bushel.
More corn in stock
Rain chances increase slightly in the Midwest, but the outlook for the western Corn Belt remains unfavorable. Yet the market was only thinking about the USDA increases in corn. U.S. corn inventories for 2016/17 increase from 2.295 to 2.370 million bushels and 2017/18 corn inventories from 2.110 to 2.325 million bushels. Corn yields remain at 170,7 bushels per acre. This amounts to a slightly larger harvest of 14,26 billion bushels. The CBoT therefore fell considerably: -0,16.
Soybeans slightly positive
The figures for soybeans are seen as neutral to slightly positive. Closing stocks are expected to decline compared to the June figures. Soybean inventories for the current season drop from 450 to 410 million bushels and for 2017/18 from 495 to 460 million bushels. The harvest estimate is slightly higher and now stands at 4.260 million bushels. The market responded with a reduction, partly because cooler temperatures are planned in the Midwest.