Wheat, corn & soy crop reported by USDA smaller than expected


U.S. farmers planted 2.2 percent less wheat than earlier forecast due to rain and floods in the northern Plains region. Because of seedling delays, USDA contacted growers in Minnesota, Montana, North Dakota and South Dakota during July as there was a large percentage of land was not seeded when the annual planting survey was done in the first half of June.

USDA did not provide a break-down of how state-by-state plantings changed, but total spring wheat plantings were down 7 percent from June 30 estimates, and durum wheat plantings were down 18 percent.

The corn crop will be 1 percent smaller than expected by analysts. With the harvest only weeks away, the Agriculture Department pegged the corn crop at 12.914 billion bushels and soybeans at 3.056 billion bushels, 4 percent smaller than traders expected.

The corn stockpile will shrink to 714 million bushels before the next harvest, 5 percent below trade expectations and the smallest end stocks in 16 years.

Soybean production is lower than expected due in part to rains and flooding in the northern Plains that reduced plantings by 500,000 acres.

During a media teleconference following the report, Price Futures Group Vice President Jack Scoville told reporters that USDA’s trimming of the yield numbers caught many traders by surprise.

Scoville on the Production Cuts

So, the next question is what USDA will do to its yield estimates in subsequent reports this season? Scoville isn’t convinced that the yield numbers have to come down further, but he’s not willing to rule it out at this point.

Scoville on Further Yield Cuts

Price Futures Group is a brokerage firm headquartered at the Chicago Board of Trade in Chicago, Illinois.