USDA released it’s crop production and world agricultural supply and demand estimates. Progressive Ag’s Randy Martinson says some of them were unexpected, with spring wheat production increased by 42 million bushels and supplies increased by 47 million. Martinson said the trade paid attention to world wheat numbers, especially with Russia, Australia and Canada:
“Australia’s production was but by about 1.2 billion metric tons, Canada’s production was cut by about 1.1 million metric tons, there was no change done in the former Soviet Union. This kind of leads us to believe that we might not be seeing much of a follow through from export bans from the Black Sea region. In all, wheat production numbers came in a little bit neutral, the demand side is what came in friendly and that is what is helping us.”
Wheat stocks numbers dropped by about 44 million bushels, which Martinson says was a surprise. He also says the corn numbers were confusing because they didn’t do what anyone expected. Planted acres increased by half a million. Beginning stocks were down by 193 million bushels and production dropped by nearly 21 million so supply dropped by nearly 214 million bushels.
“USDA cut exports which was expected. But in the end it still came in showing a stocks reduction by 114 million bushels which was not expected by the trade. That was friendly to the foreign market. Price dropped by about a dime, but it was friendly because of the increase in lower stocks.”
For soybeans, Martinson said he didn’t expect to see any change in the acres. But USDA increased harvested and planted acres by more than 1 million. Martinson says soybean end usage has gone up in this report too.
“That was completely offset by an increase in crush by 40 million, and increase in exports, the majority of it going to China, by 210 million bushels. We saw our demand increase by 250 million bushels in this report. In all it should have been a little bit bearish for the soybean market, but yet they have had a tough week. Price was dropped for soybeans in this report from $16.00 to $15.25 this month.”
Overall Martinson says the numbers in the report were very unexpected.