U.S. farmers will soon harvest the largest wheat crop in four years and the largest hard red winter crop in five years, according to USDA’s latest monthly report.
The wheat supply drew bearish reactions from investors, who sent prices lower at major U.S. markets. USDA predicts a total wheat harvest of 2.077 billion bushels, the largest since 2013. The hard red winter harvest of 938 million would be up 9% from the previous forecast.
“USDA’s wheat production estimate is bearish, with the hard red winter wheat crop getting much bigger. There’s not a lot of hope left for wheat, unless weather becomes an issue for spring wheat or corn and beans,” said Bryce Knorr, Farm Futures senior grain analyst.
U.S. corn and soybean harvests were left unchanged at 14.43 billion and 3.8 billion, respectively, although exports were increased for both and ending stocks lowered. Less production in Brazil should help U.S. corn exports, USDA said.
U.S. wheat futures traded lower after the report, soybeans were a little higher and corn a few cents lower.
“USDA was aggressive in its cut to Brazilian corn production, which translated into bigger exports and smaller carryout for both 2015 and 2016,” said Knorr.
Brazil’s corn crop was cut to 77.5 million metric tons from the previous year’s 85 million and the soybeans went to 97 million from 97.2 million.
“The big question mark now is the size of the Argentine crop. USDA made no change to its estimate today, but cut global ending stocks anyway, reflecting lower supplies from Brazil and Uruguay,” said Knorr.
World corn and soybean ending stocks were lowered from the May forecasts, due in part to the smaller U.S. ending stocks.