June 11, 2015

USDA raises wheat forecast after rains

The United States Department of Agriculture (USDA) has raised its winter wheat forecast following heavy rains across the southern and central US Plains during May which boosted production levels.

Winter wheat production was forecast at 1.505 billion bushels, up 33 million bushels from the outlook it issued last month. It also raised its average yield outlook to 44.5 bushels per acre from 43.5 bushels per acre.

Average yield for Kansas, the largest production state for winter wheat, was raised by 5 bushels to 37 bushels per acre.

However, the heavy rains, which caused a drought in parts of the Plains, also added disease pressure on the crop and likely caused lodging in some fields.

"The wheat numbers were high, and we are seeing some of the buying come out of the market," said Jack Scoville, analyst for the Price Futures Group. "There is some damage (to US wheat) out there, but they (USDA) wouldn't have had a chance to get that into the report."

USDA pegged 2015/16 domestic end stocks for wheat at 814 million bushels, up from 793 million in May.