U.S. Wheat Prices Up on Wheat Acreage Decline, USDA Reports ShowTue, 12 Jan 2016 17:20:06 CST
A huge decline in U.S. winter wheat acres across the Great Plains was the most surprising news to come out of five crop reports released Tuesday by the U.S. Department of Agriculture. The decline in wheat acres to the second lowest level since 1913 sent wheat prices climbing, according to Market Analysist Tom Leffler of Leffler Commodities. U.S. winter wheat acres were estimated at 36.6 million acres. USDA lowered the nation’s winter wheat acres by seven percent from 2015 and acres were 14 percent lower than 2014. Radio Oklahoma Ag Network’s Leslie Smith interviewed Leffler for analysis of these USDA reports. Click or tap on the LISTENBAR below to listen to the full interview.
The nation's Hard Red Winter (HRW) wheat acres were estimated at 26.5 million acres, down nine percent from a year ago. Leffer said that’s the lowest since 1957. Oklahoma’s wheat acres were down eight percent from last year at 4.9 million acres. Kansas was down eight percent at 8.5 million acres. Wheat acres in Texas wheat acres were down 12 percent at 5.3 million acres. Nebraska reported record low acreage at 1.28 million acres. That’s 14 percent below a year ago. The nation's Soft Red Winter (SRW) wheat planted acres were estimated at 6.72 million acres, down five percent from last year.
That’s where the friendly news ended for wheat. In the U.S. grain stocks report, Leffler said wheat stocks came in 40 million bushels higher than what the trade was looking for and 208 million bushels higher than a year ago. All wheat stored in all positions on December 1, 2015 totaled 1.74 billion bushels, up 14 percent from a year ago. He said ending stocks also came in larger than expected it totaling 941 million bushels. That’s 30 million bushels more than month ago.
The U.S. corn and soybean production estimates were neutral to friendly. Leffer said they did come in lower than a month ago. USDA estimated U.S. corn production at 13.6 billion bushels. That was 53 million bushels less than last month. The average yield in the United States was estimated at 168.4 bushels per acre. This was down 0.9 bushel from the November forecast. The ending stocks for corn increased by 17 million bushels over last month at 1.802 billion.
U.S. soybean production was lowered, but production remains to be record setting. Leffler said it was lowered by 51 million at 3.93 billion bushels. The average yield per acre was estimated at a record high 48.0 bushels, 0.3 bushel below the November forecast. Soybean ending stocks were decreased by 25 million at 440 million.
In the World Agricultural Supply and Demand Estimates (WASDE) report, the biggest adjustment came in the ending stocks. Leffer said soybean ending stocks were lowered by 3.3 million metric ton (MMT). World corn ending stocks were lowered by 2.9 MMT. Global wheat ending stocks were increased by over 2 MMT. In looking at global production, USDA left Argentina’s soybean production estimate unchanged at 57 MMT. Brazil’s soybean production estimate was also unchanged at 100 MMT.
“We still have a lot of supplies to work through, the upside in this market to continue is really going to be tested,” Leffer said. “The only thing that can continue to really help this market is if the funds start to liquidate some of their short positions, bringing a little bit more buying into the market.”
Click here for the USDA U.S. Crop Production report.
Click here for the USDA U.S. Crop Production 2015 Annual report.
Click here for the U.S. Grain Stocks report.
Click here for the U.S. Winter Wheat Seedings report.
Click here for the WASDE report.
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