The United States Department of Agriculture found more wheat growing in American fields and record per acre yields in its July production report, but the market shrugged off the news.
The estimates were within expectations of analysts who were more interested in rumours of new price-supporting demand for U.S. wheat.
“There is a fair bit of talk around the wheat pits these days about exports and that basically overshadowed the report,” said commodity trader David Reimann of Benson Quinn GMS.
For Canadian spring wheat growers, the report offered good news. The U.S. spring wheat production estimate held steady.
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The yield estimates for wheat and soybeans were neutral to bullish, but these were largely a sideshow when compared with corn.
“The flip side of today’s wheat report was the as-expected production estimate for spring wheat,” said Kansas State University agricultural economist William Tierney in a market commentary.
The USDA expects total U.S. wheat production to climb 43 percent from last year’s droughted crop. At 2.311 billion bushels, it is 40 million bu. above trade expectations, Tierney said.
He believes overall wheat prices are close to their seasonal low, which tends to occur in July during the winter wheat harvest and he thinks there is a good chance for a post-harvest rally.
“If exports continue to improve, that along with a slackening of harvest pressure could provide a fundamental basis for the beginning of a post-harvest rally,” he said.
“Lower world wheat production, possibly the tightest world ending stocks in over 40 years, and any unexpected problems with the southern hemisphere’s wheat crop could also provide support to the market.”
