As U.S. crops continue to sail through generally good weather, markets have been taking a breather.
The most recent United States Department of Agriculture crop production report on July 12 failed to shake the market, even though it found less wheat than it predicted last month.
USDA lowered its winter wheat production estimate by four percent, but that wasn’t enough to scare the market, said Ken Ball of Benson Quinn GMS in Winnipeg.
The winter wheat crop is now too far advanced for anything but the worst conditions to seriously affect markets.
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“They’re moving over the hump in the U.S. and moving downhill for the rest of the season,” he said.
Canadian crops still have a long path to follow where much could go wrong, but there is less potential for U.S. crop prospects to change dramatically.
Ball said price lows will be set in late July and early August, if the weather co-operates and positive crop condition reports relieve fears of short supplies.
“We’re likely to have the lows at the best crop ratings,” said Ball.
While the USDA trimmed its domestic wheat production estimate, the global production prospect improved. It estimated world wheat production will increase by six million tonnes from its outlook last month, which would make it two million tonnes more than last year’s crop.
That would create the first increase in ending stocks since 1999-2000.
The USDA expects Russia, China, the European Union and Romania to increase production significantly.
U.S. corn stocks were increased by 90 million bushels over USDA’s last report because of expectations of increased production.
Ball said the increase in corn projections barely rattled markets because they had been expecting bigger corn numbers.
“It’s so big, it’s not likely to get much higher,” said Ball.
“Everyone’s expecting a monster crop.”
The expected increase in U.S. corn production will raise world ending stocks of coarse grains, the USDA said, but with increased consumption the world will still be left with the lowest stocks since 1976-77.
