WASHINGTON, D.C. (RFD NEWS) — Grain markets are bracing for the latest USDA World Agricultural Supply and Demand Estimates (WASDE) report, with analysts expecting new production and ending stocks estimates to potentially move prices.
The report will provide updated estimates for old- and new-crop ending stocks, along with production projections for corn and soybeans. It is also the first WASDE report of the year to incorporate USDA’s National Agricultural Statistics Service data for corn and soybean yield estimates.
USDA is expected to project corn production roughly 1 billion bushels below last year’s crop, while soybean estimates are largely in line with previous expectations.
Ethanol Demand Supports Corn
Despite expectations for a smaller corn crop, demand from the biofuels sector remains strong.
U.S. ethanol production increased 3 percent during the first five months of the year and was 8 percent above the five-year average. Ethanol exports climbed 12 percent from a year earlier and were 43 percent above the five-year average.
USDA expects corn use for ethanol to increase another 1% during the next marketing year, keeping biofuels an important source of corn demand.
Wheat Crop Faces Major Losses
Wheat producers are also facing significant production challenges.
USDA projects Kansas could see its smallest winter wheat harvest since 1957. Kansas State University researchers estimate the state’s crop could total about 471 million bushels, down sharply from 804 million bushels last year.
Drought and early-season freezes have contributed to the losses, with researchers warning that continued adverse conditions could create additional challenges.
Sorghum Conditions Continue to Decline
Drought is also taking a toll on the nation’s sorghum crop.
USDA’s Brad Rippey says just 35 percent of U.S. sorghum is rated good to excellent, down from 36% a week earlier and well below the 66 percent recorded at the same time last year.
Meanwhile, 30 percent of the crop is rated poor to very poor.
The latest U.S. Drought Monitor shows nearly half of the Lower 48 experiencing some level of drought. A new drought assessment is expected Thursday morning.
