Wheat Crop Cut More Than Expected
The USDA surprised the wheat market on Friday by lowering its estimate of the 2005 U.S. wheat crop by 3.2%, putting production below all trade estimates.
The USDA’s annual Small Grains Summary Report pegged 2005 U.S. all-wheat production at 2.098 billion bushels, down from the department’s Sept. 12 estimate of 2.167 billion bushels.
The USDA cut spring wheat production more than most in the trade expected and surprised the market by trimming 27 million bushels off the winter wheat crop.
The USDA pegged U.S. spring wheat production at 504.5 million bushels, compared with its previous estimate of 553.4 million bushels and trade estimates averaging 530 million bushels in a range from 506-578 million.
Winter wheat production was pegged at 1.494 billion bushels, down from a previous figure of 1.521 billion bushels and trade estimates averaging 1.520 billion in a range from 1.505-1.525 billion.
Durum wheat production was raised to 100.25 billion bushels from a previous estimate of 93 million bushels and trade estimates averaging 92 million.
The lower production figure indicates that the USDA will make a substantial cut in its 2005-06 U.S. ending stocks estimate when it releases its next monthly supply/demand estimate on Oct. 12.
Editors note: Richard Brock, The Corn and Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.
To see more market perspectives, visit Brock's Web site at www.brockreport.com.