Wheat: Informa Cuts U.S. Production Forecast — DTN

    Estimates of the winter wheat crop continue to disintegrate. Private analytical firm Informa Economics now pegs winter wheat production at 1.4 billion bushels, 138 million bushels below last year’s crop and 6 mb lower than USDA’s May forecast.

    That estimate is a combination of hard red winter, soft red winter and winter white wheat. Production in all three wheat classes is forecast to be smaller than last year.

    Informa estimates the hard red winter wheat crop, which has been plagued by drought and late freezes, will total 744 mb with an average yield of 33.2 bushels per acres. That’s 2.4 mb less than what USDA forecast in early May. The average yield is 3.6 bushels lower than last year.

    The average Kansas HRW wheat yield came in at 30 bpa, which leads Texas’ 29 bpa average and Oklahoma’s 19 bpa average.

    “Informa’s estimate that U.S hard red winter wheat production will total 744 million bushels is down slightly from USDA’s May estimate of 746.2 mb,” DTN Analyst Todd Hultman said. “Both estimates seem too high, as this year’s drought was more severe in Oklahoma.”

    The SRW wheat crop will also be smaller than last year, down 118 mb to 447 mb on a combination of reduced acreage and lower yields. Informa pegged the average SRW yield at 62.3 bpa, down 1.4 bpa from last year.

    Informa forecast white winter production at 205 mb, 3.9 mb below USDA’s May forecast and 20 mb below last year.

    A majority of the winter wheat crop is heading, Informa notes, adding that in a typical year, 40% to 50% of the harvest is complete by the end of June. USDA has not reported national harvest progress in its report. Harvest is 16% complete in Texas and 6% complete in Oklahoma. Kansas did not report harvest progress this week.

    Informa also released its global crop production forecasts, which increased production estimates for the EU, India and China over last month’s estimates.

    “The one noticeable difference is that Informa is estimating India’s 2014 wheat crop at 103 million metric tons, up from USDA’s estimate of 94 mmt and may point to an eventual increase in USDA’s world wheat estimate, if Informa’s estimate proves accurate,” Hultman said.

    The report also noted beneficial rainfall in the Ukraine during the winter wheat crop’s heading and filling. Russia’s winter crop conditions are above average, Informa’s affiliate, SovEcon, reports.

    “Informa’s new round of estimates on Thursday are very close to USDA’s May estimates for U.S. winter wheat production and are offering little for prices to respond to,” Hultman said, referring to Thursday’s price action.

    Over the last month, Kansas City July futures declined from $8.45 to $7.16 as of Wednesday’s close.

    “The lower estimate for the U.S. HRW crop is the result of drought in the southwestern Plains. The U.S. HRW crop amounts to 3% of world production, and so we watched the drought lose its ability to impact wheat prices after USDA’s May 9 WASDE report came out,” Hultman said. “That turned the market’s attention back toward the favorable overall start for this year’s world’s wheat crops.”

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