Market Analysis
After the USDA released its World Agricultural Supply and Demand Estimates (WASDE) Thursday, corn and soybeans took the lead story away from wheat. Ending stocks for wheat for 2017/18 have been lowered 25 million bushels, the report citing increased exports as the cause.
Wheat acres in the U.S. in 2017 were at lows not seen for a century. Going into 2018, it looks like that could be the case as well with farmers planting less wheat.
In 2017, wheat acres hit a 108-year low, and they’ll be fewer acres in 2018.
Wheat growers have had a rough go the last couple of years with low prices and the least amount of acres planted in nearly a century.
In 2016, wheat farmers have seen ugly circumstances, now they’re trying to help the problem by reducing acreage.
Scarce stocks could send prices soaring or crashing just as they did in 2008 and 2009, when prices rose to record-highs only to crash following the Great Recession.
Even though stocks are declining, supply remains secure worldwide.
The Kansas City Board of Trade’s December wheat contract prices have declined $1.94 to $7.05 since Aug. 29.
Between now and December 1, wheat prices may be anywhere between $7.50 and $11.
The USDA released the December WASDE reports Friday and the market just yawned.