Crop Reports Good News for Corn Producers, Not so Good for Wheat Growers, Anderson SaysFri, 10 Jan 2014 12:24:12 CST
The USDA released its 2013 Crop Production Summary report, the Winter Wheat Seedings report and the WASDE report on Friday. Markets were quick to react and Oklahoma State University Extension Grain Marketing Economist Dr. Kim Anderson tells Radio Oklahoma Network’s Ron Hays the reports were positive for corn producers and not so positive for wheat growers.
“I think it’s negative for wheat. You look at the analysts their pre-release expectations of wheat ending stocks at 559 million came in at 608 million. That’s just well above market expectations. And, of course, the market’s reacting to that.
“And if you look at what they changed on the wheat, the lowered the amount of wheat that was fed by 60 million bushels and they raised our exports by 25 million. So, a net loss there on the wheat which we saw in the ending stocks.
“If you look at the wheat plantings, that should be semi-positive for hard red winter wheat. The expectations were for 30.4 million acres and it came in at 30.1 so less acres than the market expected.
“So, I would expect your old crop wheat in the bin to be worth less. That will probably pull down the July contract, but maybe not as much. You got a mixed bag in wheat.”
The numbers for corn were far more positive, Anderson says.
“On your crop production, the analysts were expecting just over 14 billion bushels and they got just barely over 13.9 billion. They looked at quarterly stocks on corn and they were expecting 10,770,000; they got 10.4 million which is almost 300,000 less than they had expected.
“So, you look at corn ending stocks for the marketing year. The market was expecting 1,844,000,000. They got 1,631,000,000, significantly less on the ending stocks, 213 million bushels of corn less than expected.
“So, it looks positive for corn prices and negative for wheat.”
Anderson said wheat seedings across the Southern Great Plains for the 2014 crop year were reported higher in Texas and lower in Oklahoma and Kansas. Oklahoma’s seeded acres dropped about five percent and Kansas was down seven percent.
“I think that is significant because the heart of the hard red winter wheat production is in northern Oklahoma and southern Kansas. You’ve just got the northern two tiers of Oklahoma and the southern two or three tiers of Kansas and that’s the heart of the belt and you’ve got less wheat planted. I think that’s significant for the hard red winter wheat.”
Anderson said he thinks the reduction in wheat acreage is mostly due to an increase in canola acres.
“And I think that’s good news because it indicates we’ll produce a better quality, a cleaner quality of wheat with less foreign material-your rye and your dockage in it.”
He said some of the lost acres may have been due to summer crops that were harvested late and have been planted back to wheat, but have not yet been counted as wheat acres.
Anderson said the market reacted strongly to the wheat numbers on Friday, but he thinks traders will re-evaluate their figures over the weekend. If the Kansas City March and July contracts stay below $6.30 Monday and Tuesday, he said the next support level down will be at $6.
“Let’s just hope we don’t break $6 because once you break $6 on the March and July contracts, it just doesn’t have a floor down there for awhile.”
You can hear Anderson's full analysis by clicking on the LISTEN BAR below.
Click on the report names below to read the full reports.
2013 Crop Production Summary
Winter Wheat Seedings
World Agricultural Supply and Demand Estimates
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