CBOT wheat futures closed higher this week as world wheat stocks were lowered one million metric tons in the updated USDA monthly report. That left US ending stocks down slightly, from 430 million bushels to 425 million bushels. What type of yield estimate will the USDA start with for the 2018 season? The yield will also be down from 2016 at 46 bushels per acre.
Global course grain production is an estimated at 125.9 million bushels higher, for a total of 52.0681 billion bushels.
Paris wheat futures ended slightly higher on Friday, coming off an earlier one-week low, as Chicago grain prices steadied after a day-earlier slide sparked by a forecast for a record US corn yield.
Bottom-line, record yield being forecast for the USA more than offsets the reductions in the global forecast.More news: TPP nations 'have made good progress' on deal, no-show 'a misunderstanding'
"The idea is that if corn yields can be so high, the USDA might increase soybean yields in its next report". The U.S. season-average farm price remains unchanged at $3.20 per bushel. That might set the stage for a move to confirm cycle lows, he says.
The USDA production and yield estimates all were above average trade expectations of 14.323 billion bushels and 172.3 bushels an acre for corn and 4.404 billion bushels and 49.2 bushels an acre for soybeans, respectively.
"It's a major surprise for the trade to see a production increase this large for corn", said Brian Hoops, Midwest Market Solutions, during the MGEX crop commentary call. Argentina and Brazilian production was left "unchanged".
"January futures are fighting to hold above the support line drawn off August-November lows, which comes in around $9.90, which is also right on the 25-day moving average", he says. That was 41% lower than last week and down 53.8% from this week a year ago. Ending stocks were lowered by 22 million bushels but remain at record levels. Durum carryover was raised 1 million bus to 28 million bus based on a like increase in supply.