Agricultural News
Leffler Finds USDA Raises Wheat Production, Sends Prices Lower
Wed, 10 Jun 2015 19:05:11 CDT
The grain markets reacted negatively Wednesday to the latest crop production reports released by the U.S. Department of Agriculture. The largest losses took place in the wheat market and the least amount of damaged occurred in soybeans. In reviewing the report, Tom Leffler of Leffler Commodities said the U.S. wheat ending stocks came in at 814 million bushels, that was an increase over 793 million bushels over last month's projections.
"We saw the yield increase by seven tenths of a bushel per acre, putting the average yield in wheat at 44.2 bushels per acre," Leffler said. "That caused production to increase by 34 million bushels in all-wheat."
The nation's wheat carryover increased by three million bushels. The feed and residual usage increased by 15 million bushels. Oklahoma's winter wheat production was lowered by a little over four million bushels over last month in lowering state average by one bushel per acre. Texas wheat production was lowered 11.25 million bushels in lowering the average state yield by three bushels per acre, while the projection for the Kansas wheat crop increased. Leffler said USDA increased the estimate for Kansas wheat production by 42 million bushels by increasing the state yield by five bushels per acre for total production of 314 million bushels.
"So, the wheat took the biggest hit today, going to be a lot of controversy about - is this really reflecting that much of a positive increase in Kansas or is there more problems with the additional rain than what they are NOT accounting for," Leffler said. "The next thing is, with the rain that's in the forecast starting tomorrow that runs into next week, that's not going to be good news for the wheat market, so we might have over done it a little bit today to the downside."
Radio Oklahoma Network's Leslie Smith interviews Leffler. Click or tap on the LISTENBAR below.
The USDA report was mostly neutral for soybeans. Leffler said new crop ending stocks came in at 475 million bushels. This was slightly lower than trade expectations and 25 million bushels lower than USDA's May estimate. USDA lowered the carryover by 20 million bushels from old crop to new crop and increased the crush by five million bushels for a reduction of 25 million bushels in the ending stocks.
Corn came in close to industry expectations at 1.771 billion bushels. Leffler said that this was an increase from 1.746 billion from last month, as USDA carried over 25 million bushels from old crop into new crop ending stocks.
USDA also released the World Agricultural Supply and Demand estimate monthly report. Argentina's soybean production estimate was increased by a million metric ton to 59.5 million metric ton. Brazil production was left unchanged at 94.5 million metric ton. That continues to confirm the large crop coming out of Brazil. Leffler said new crop ending stocks for soybeans were lowered by three million metric ton. World corn stocks were increased by three million metric ton and world wheat stocks dropped by about a million metric ton.
"Not a lot of big news out of there, but probably the biggest news we saw today was just overall the negativeness that took place in our wheat," Leffler said.
Looking ahead, Leffler said traders will be watching the weather for wheat harvesters and row crops. USDA will be releasing their planted acreage number and the quarterly stocks report on Tuesday, June 30th .
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