December WASDE report does not do wheat any favors

Dec 13, 2017

Some market analysts had discussed the potential for some crops to experience a Christmas rally

By Diego Flammini
News Reporter
Farms.com

December’s World Agricultural Supply and Demand Estimates (WASDE) report didn’t have much good news for American wheat growers, according to Moe Agosinto, chief commodity strategist with Farms.com Risk Management.

“Wheat can’t seem to catch a break from the USDA,” Agostino said after a live web analysis of the USDA’s monthly report. “The USDA printed another record global wheat crop and that’s going to weigh on the market.”

Global wheat ending stocks are about 268.4 million metric tons (MMT), according to the USDA.

As a result, U.S. ending stocks are up by 25 million bushels to 960 million bushels. This increased inventory has pushed wheat prices down by about 10 cents.

The average farm price for wheat ranged from US$4.50 to US$4.70 per bushel, according to the December WASDE.

And wheat wasn’t the only commodity to have a worse-than-expected end of 2017.

Some market analysts had discussed the potential for some crops to experience a Christmas rally but that market shift doesn’t appear to be coming.

“I think we’re going to have to wait until 2018 before anything changes,” Agostino said.

The average farm price for corn ranged from US$2.85 to US$3.55 per bushel, according to the December WASDE, which is down 5 cents from the November report.

And the average farm price for soybeans ranged from $US8.60 to US$10 per bushel, down from the November report higher-end price of US$10.15 per bushel.

When it comes to corn and soybeans, the South American crops are putting pressure on American farmers.

“Some of the Brazilian agencies came up with big numbers, but did lower them due to pressure from Argentina,” Agostino said, adding some market information indicates South American soybean production could reach a record high in 2018.

The first 2018 WASDE report will be released on Jan. 12.

For exclusive access to Moe Agostino's live monthly WASDE analysis and other risk management services, sign up for a free eight-week trial.

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