Wheat, maize and soy are all heading for lower closing stocks. The United States Department of Agriculture (USDA) estimates global closing stocks of grain (2018/2019 season) at 594,46 million tons. That is a decrease of 42 million tons.
Although wheat supplies are declining, the USDA is responding WASDE report based on the assumption that the wheat harvest in the United States (US) is increasing. This is estimated at 1,821 million bushels, an increase of 5% compared to last year. The growth is a result of the expansion of the area and slightly higher yields per hectare. However, the winter wheat harvest is actually showing a significant decline.
This is due to drought in production states such as Kansas, Oklahoma and Texas. The harvest shrinks by 6% to 1,19 million bushels. This is the lowest yield in more than 10 years.
Also less corn and soy
In this report, the USDA comments for the first time on the closing stocks for the 2018/2019 season. Global ending stocks for wheat (2018/2019) are estimated at 264 million tons, a decrease of 6 million tons. Global wheat production drops by 10,6 million to 747,8 million tons, while consumption increases by 10,1 million to 753,9 million tons.
Closing stocks of corn also showed a sharp decline. The USDA predicts a decline of as much as 35 million to 159 million tons. This is due to more consumption. Despite a disappointing Argentine soy harvest, the USDA expects increasing production (+17 million to 354 million tons). Yet closing stocks are reportedly declining. The USDA predicts a decrease of approximately 5 million tons to 86,70 million.
'Bullish' continues
The expected ending stocks often determine the market. Now that these have been handed in, the expectation is that the 'bullish' mood will continue to apply; or rising prices. The weather conditions, in the various production areas, will exert influence in the near future.