Thursday, June 12, 2014
Chumrau_on_Wheat

Chumrau on Wheat: USDA Offers Bearish U.S. Forecast

AgFax.Com - Your Online Ag News Source


USDA’s first monthly World Agricultural Supply and Demand Estimates (WASDE) report of marketing year 2014/15 released June 11, 2014, seemed to support assertions that the U.S. is the only major wheat producing country with weather challenges this year. USDA lowered its projected 2014/15 U.S. production from last month but increased its global estimate. The agency attributed both adjustments to weather.

USDA reduced total projected U.S. wheat production for 2014/15 by 500,000 metric tons from May to 52.9 MMT. If realized, it would be 9 percent lower than last year and the smallest output since 2006/07. The outlook for spring wheat is quite positive, but USDA expects a below-average winter wheat harvest leading to lower overall production.

Even though it is finally raining in much of the southern and central U.S. plains, the drought took its toll on hard red winter (HRW) conditions. In a monthly crop production report also on June 11, USDA lowered its HRW forecast by 3 percent from last month to 19.6 MMT. If realized, it would be 19 percent lower than last year’s already below-average crop and the smallest HRW harvest since 2006/07.

Dry weather in the Pacific Northwest also threatens the region’s white wheat crop. USDA pegged winter white wheat production at 5.61 MMT, down 1 percent from last month and down 8 percent from 2013/14. USDA increased its soft red winter (SRW) projection from last month to 12.4 MMT, which would be 9 percent greater than the five-year average but still 20 percent below last year’s sizable crop. USDA will release its first production estimates of spring wheat classes on July 11, 2014.

Higher estimated U.S. beginning stocks at 16.1 MMT this month could not offset the lower production estimate, leaving total 2014/15 U.S. supply down 310,000 MT to 73.3 MMT, compared to 82.1 MMT in 2013/14. With lower available supplies and increased production by competitors, USDA reduced expected U.S. exports from 25.9 MMT in May to 25.2 MMT. USDA pegged total world exports at 152 MMT, the third highest of all time.

Despite a small decrease in global beginning stocks, USDA boosted projected global wheat supplies by 4.1 million to 888 MMT thanks to a 5.2 MMT increase in production outside the U.S. USDA now expects 2014/15 world wheat production to reach 702 MMT. If realized, it would be 2 percent lower than last year’s record output but only the second time world output topped 700 MMT.

The largest month-over-month increase was 1.85 MMT in India, where USDA now expects the country will set a new production record of 95.9 MMT, up 3 percent from last year and besting the previous record of 94.9 MMT set in 2012/13. USDA left India’s projected exports at 3.5 MMT, well below the more than 6.0 MMT exported each of the last two years but still well above the five-year average of 2.77 MMT.

The largest increase over the May production estimates of major exporters was 1.37 MMT in the EU. USDA expects total EU production to reach 146 MMT, up 2 percent from last year and 6 percent higher than the five-year average. Early spring and summer rainfall have significantly increased yield potential in France and Germany. The European Commission this week raised its forecast for 2014/15 soft wheat crop to 137 MMT from 133 MMT previously. Germany’s farm cooperatives increased their forecast this week for 2014/15 output to 25.5 MMT, 2 percent greater than last year. USDA estimates the EU will export 28.0 MMT, which would be the second most behind last year’s 30.0 MMT.

USDA raised its Russian production forecast by 1.0 MMT to 53.0 MMT based on favorable growing conditions. Although Russia’s Institute for Agricultural Market Studies (IKAR) arrived at the same forecast number, it reduced its estimate from 54.5 MMT last month after a crop tour observed dry conditions in the country’s wheat-growing belt. However, IKAR added that timely rains in the next few days would significantly boost production potential just ahead of harvest.

USDA increased estimated Russian exports by 500,000 MT to 19.5 MMT because of the larger expected production and competitive prices, which would be 5 percent higher than last year and 32 percent greater than the five-year average.

Weather has been more favorable in Ukraine and IKAR expects a large grain harvest. IKAR noted that farmers there applied one-third less fertilizer than last year, which could affect production and quality. USDA left Ukrainian production unchanged from last month at 20.0 MMT, down 10 percent from last year but slightly higher than the five-year average. Ukrainian exports were also unchanged at 8.5 MMT, which would be 1.0 MMT lower than last year but 20 percent great than the five-year average.

In May, USDA forecasted global consumption at 696 MMT. It added 3 MMT to that forecast this week due to increased wheat feeding China and the EU. The increased consumption forecast mostly offset higher expected production. It left ending stocks just 1.19 MMT higher at 189 MMT, up 1 percent from last year and 2 percent below the five-year average.  

Although USDA did not change its global supply and demand outlook much this month, once again, weather is proving to be the key factor shaping the world’s wheat market. Most major producers hope their luck does not change while many U.S. farmers are still looking to the skies for a shift in their fortunes.

Tags: , , , , , , ,


Leave a Reply

Name and Email Address are required fields. Your email will not be published or shared with third parties.

Sunbelt Ag News

    DTN Livestock Close: Red-Hot Bullishness Storms Through Cattle Complex7-22

    Doane Cotton Close: ICAC Releases Supply and Demand Forecasts7-22

    AFB Grain-Soybean Close: Prices Continue Declines with Aug. Soy Gains7-22

    AFB Cotton Close: Moves Higher on Continued Consolidation7-22

    AFB Rice Close: Futures Turn Higher7-22

    DTN Cotton Close: Settles with Modest Gains7-22

    USDA: Don’t Forget Farm Bill Conservation Compliance Changes7-22

    DTN Grain Close: Markets Hit New Lows7-22

    USDA: Weekly National Peanut Prices7-22

    AgFax Cotton Review: Worst Price Slump in 55 Years; Weather Delays Development7-22

    DTN Livestock Midday: Cattle Locked in Limit Higher Trade7-22

    Good Reports on Corn; Wet Weather Stressing Beans — DTN7-22

    DTN Grain Midday: Corn, Wheat Lower, Soybeans Mixed7-22

    Cattle: Nebraska Study Finds No Ill Effects from Zilmax — DTN7-22

    South Korea Importers Returning to U.S. Corn, DDGS — DTN7-22

    DTN Cotton Open: Trades Above Highs of Prior 3 Days7-22

    DTN Livestock Open: Futures Predicted to Start Mixed7-22

    DTN Grain Open: Futures Show Small Gains7-22

    Keith Good: Soybeans, Corn Garner High Condition Ratings, Lower Prices7-22

    Oklahoma Farmer Modifies Business Choices Due to Wet Spring – DTN7-21

    Cover Crops a Good Replacement in Weather Damaged Fields – DTN7-21

    AgFax Rice Review: UN Prescribes Arsenic Levels; Armyworms Abound in MS7-21

    Arkansas: Emerald Ash Borer Turns Up to Threaten Ash Trees7-21

    Good on Grain: Corn Price Premiums Continue to Fade7-21

    It’s Been 18 Years – What’s Happened in Herbicide Tolerant and Insect Resistant Crops?7-21

    USDA Creates Soybeans Out of Thin Air, Sorta — DTN7-21

    Mississippi Wheat: MSU Releases Variety Trial Data7-21

    Flint on Crops: Bacterial Blight Makes a Comeback in Cotton7-21

    California Cotton: Crop Moving Fast. Strong Yield Potential – AgFax7-20

    Peanut Insects Forcing Decisions In Some Southern Fields – AgFax7-19

    Florida Cotton: Fertilizing Late Planted Crop7-18

    Rose on Cotton: Future Holds Possibility of New Crop Sales Increase7-18

    Rice Market: USDA Report Leaves Unanswered Questions7-18

    Rice Crop: Texas Crop Heading; Arkansas Recovering From Heavy Rains7-18

    Midwest: Late-Summer Drought Unlikely – DTN7-18

    Do Bigger Farms Really Have Lower Costs? Not Really.7-18

    Welch on Wheat: Production Increased, Usage Decreased7-18

    Welch on Grain: Higher Than Expected Corn Stocks7-18

    Cleveland on Cotton: The Low Price Cure? Maybe.7-18

    USDA: Peanut Price Highlights7-18

    Georgia Cotton Insect Advisor: New App for Aid with Stink Bug Decisions7-18

    Documentation of Farm Assets, Contracts Aids Survivors — DTN7-18

    AgFax Wildlife Review: Hunting Wild Hogs in the Air and on the Air7-18

    DTN Dried Distillers Grains: Fall in Prices Slowing Down?7-18

    Georgia: Vidalia Onion Growers Battling Yellow Bud Disease7-18

    Interest Rates Have Been Too Low for Too Long – DTN7-17

    Brazil Ag Investments Switch to Logistics, Technology – DTN7-17

    Herbicide Resistance: Exploring Weed Control Options – DTN7-17

    Mississippi: MSU Hires International Rice Breeder7-17

    Mississippi: Late-Season Delta Field Day, Stoneville, Aug. 137-17

    U.S. Grain Transportation: All Mississippi River Locks Open7-17

    North Carolina: Soil Information Class Available to Public Online7-17

    Mississippi: Irrigation Turnrow Talks, July 23-257-17

    U.S. Drought Outlook: Improvements Expected in Plains, Southwest7-17

    North Carolina Corn: Southern Rust Alert, Spray Susceptible Hybrids7-17

    Keith Good: Beige Book — Observations on Ag Economy7-17

    U.S. Energy: California’s Low Carbon Fuel Standard Remains in Effect7-17

    Sunbelt Ag Events

     

    About Us

    AgFax.Com covers agricultural trends and production topics, with an emphasis on news about cotton, rice, peanuts, corn, soybeans, wheat and tree crops, including almonds, pecans, walnuts and pistachios.

      

    This site also serves as the on-line presence of electronic crop and pest reports published by AgFax Media LLC (formerly Looking South Communications).

        

    Click here to subscribe to our free reports.

      

    We provide early warnings and confirmations about pests, diseases and other factors that influence yield. Our goal is to quickly provide farmers and crop advisors with information needed to make better and more profitable decisions.

         

    Our free weekly crop and pest advisories include:

    • AgFax Midsouth Cotton, covering cotton production and news in Alabama, Arkansas, Louisiana, Mississippi, Tennessee and Missouri.

    • AgFax Southeast Cotton, covering cotton production and news in Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia.

    • AgFax Southwest Cotton (new for 2013!), covering cotton production and news in Texas, Oklahoma, Kansas and New Mexico.

    • AgFax West (formerly MiteFax: SJV Cotton), covering California cotton, alfalfa, tomatoes and other non-permanent crops in California's Central Valley.

    • AgFax Rice covering rice production and news in Arkansas, Louisiana, Mississippi, Missouri and Texas.

    • AgFax Peanuts, covering peanut production in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Texas and Virginia.

    • AgFax Southern Grain: covering soybeans, corn, milo and small grains in Southern states.

    • AgFax Almonds, covering almonds, pistachios, walnuts and other tree crops in California's Central Valley.

    • AgCom 101, providing guidance to ag professionals involved in social media.

    Our newsletters are sponsored by the following companies: FMC Corporation Chemtura Dow AgroSciences.

          

    Mission statement:

    Make it as easy as possible for our community of readers to find and/or receive needed information.

              

    Contact Information:

    AgFax Media. LLC

    142 Westlake Drive Brandon, MS 39047

    601-992-9488 Office 601-992-3503 Fax

    Owen Taylor Debra L. Ferguson Laurie Courtney

          

    Circulation Questions?

    Contact Laurie Courtney