he recent World Ag Supply and Demand Estimates contained some surprising numbers, especially in wheat. Mike Zuzolo, president of Global Commodity Analytics, says he has questions on how USDA came up with the wheat totals.
Zuzolo said, “Wheat was probably the most questionable, in my mind, just because the USDA came in and even though the U.S. winter wheat harvest progress was running at a five-to-six year low because Kansas is running at 50-some percent planted at this point versus 90 percent a year ago, USDA still found a way to raise yields.”
He says the available wheat information doesn’t completely support boosting U.S. yields. Zuzolo, “I’m not surprised that they did that based upon soft red wheat yields and crop progress in harvest, but I was very surprised that they would go ahead and make that increase not having much data from the hard red wheat side of the equation and also the continued problems when it comes to the spring wheat and drought, coming in at 25 percent this week versus eight percent a year ago.”
Domestic and international weather conditions will continue to be the number one driving factor in the commodity markets going forward.