Russian Wheat Crop Record and Change in Prices in USDA Wheat Outlook

Two notable takeaways from the USDA’s most recent wheat outlook forecast.

One is that Russian wheat growers will provide formidable competition for U.S. wheat growers according to USDA Outlook Board Chair Seth Meyer.

“It’s a huge record crop after a huge record crop the prior year. Just an amazing two years in a row of excellent growing weather. Another 3.5 million metric tons on that crop, now an 81million metric ton crop.”

There was also a major change in the season ending price estimate which Meyer said is down 20 cents to $4.60 per bushel at the midpoint.

“You’re looking at changes in the balance sheet in terms of quantity, but you’ve also got current cash prices and expectations about future cash prices which play into what you think the price received by farmers will be. We see price weakness now and continued price weakness and the balance sheet still makes sense to us so that’s where the price adjustment comes despite the fact that there’s not an obvious change in the balance sheet.”

The USDA’s wheat supply and demand outlook was relatively quiet other than these two exceptions.