The wheat markets opened higher and have posted good gains Thursday following the release of a number of USDA reports. For more specific information on the numbers, please read “Less World Wheat, Record U.S. Corn and Soybeans.”
In a nutshell, wheat production came in below the average pre-report guesses. Ending stocks fell domestically and world stocks declined as expected in large due to the decrease in Russia.
Following the reports, Northern Ag Network spoke with Jim Bower, President and Founder of Bower Trading. Jim told us that the big story out of the reports is that they confirmed just how serious the Russian drought impacts are. World wheat ending stocks for the 2010 to 2011 marketing year are now expected at 174.76 million metric tons, down from 187.05 million in the July estimates. In addition to the reduction for Russia, the USDA also lowered forecasts for production in Kazakhstan and Ukraine.
Once that basis improves, Jim says to sell the cash grain and take off the hedge.
Looking towards other grains, corn is expected to break records with projected production of 13.365 billion bushels, 120 million bushels more than the July estimate. Soybean production is also expected to be record setting 3.433 billion bushels.
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