A quick glance at last night’s USDA WASDE report. US corn opening stocks lowered, resulting in the lowest stocks to use ratio for US corn since 1995-96. Surprisingly the USDA increased production by showing a larger sown area and keeping harvested yields unchanged at 179.5bu/ac (11.26t/ha) average. Big call, a large portion of the corn belt is basically growing irrigation corn the rain has been so prolific but the outer regions of the west and north west are basically in what the US call a drought. So maybe this average yield is a little ambitious in the long run. Increases in US consumption and exports still show and increase in ending stocks year on year but 9.6% S:U is low.

World wheat production estimate was reduced from 794.44mt to 792.4mt (-2.04mt) and beginning stocks were reduced by 3.3mt. Adjustments throughout the consumption side of the table were minimal netting an ending stocks balance of 291.68mt, back 5.12mt on the June estimate. The stocks to use estimate improved but only marginally. The take home message is the rally in US wheat futures is a rally being created by an issue in US domestic production. We should not expect to see their values reflected in our local cash bids 100% unless there is little chance of the importing consumer acquiring the alternative product from elsewhere, i.e. high quality white wheat.
Other wheat titbits from the report include, higher Aussie production up from 27mt to 28.5mt, Canadian production back just 500kt to 31.5mt, questionable, EU up 700kt to 138.2mt, Russia down 1mt to 85mt, there are a number of estimates lower than that out there for Russia too. Ukraine up 500kt to 30mt. Durum is tight, very tight.