The USDA released its World Agricultural Supply and Demand Estimates (WASDE) Wednesday, and spring wheat production showed a significant reduction since 2016. Down 21 percent from last year, USDA is expecting 423 million bushels to be harvested from 10.5 million acres.
The national average yield forecast sits at 40.3 bushels per acre, a decrease of seven bushels from 2016.
Spring wheat prices have remained strong due to the severe drought in the northern Plains. Joe Vaclavik, president of Standard Grain, says this is past the point of a crop scare.
“This is just a point of demand rationing now—we’ve got to get to a price that’s going to shut off the demand base,” Vaclavik told AgDay host Clinton Griffiths.
Vaclavik says there’s going to be marketing opportunities for wheat, citing July 18 contracts for both Chicago and Kansas City above the $6 mark.
“It’s similar to what we saw in the soybean market this past year: higher prices are going to encourage acreage if they stick around,” he said.
Hear what Vaclavik has to say about the global wheat picture on AgDay above.