KayDee Gilkey Less U.S. Wheat and Corn Production
by KayDee Gilkey, click here for bio

Program: Land & Livestock Report
Date: May 16, 2017

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Usually when USDA reports smaller crop production numbers, there is an opportunity for higher prices.This year’s winter wheat crop is forecast to be the smallest in the past 100 years and all wheat production will drop by 489 million bushels. USDA Outlook Board Chairman Seth Meyer says the supply is tightening up and that the 8 percent reduction in the U.S. supply of wheat could mean an increase in prices.

Meyer: “You’re going from $3.90 to a mid-point $4.25 and you say, ‘That is a pretty big increase — you aren’t going to complain about a price increase — but that is a rebound off a pretty low price.”

As far as U.S. corn production — it is down for 2017 as well. Meyer continues with the corn planting and production scenario as it looks right now.

Meyer: “From planting intentions we get a 4 million acre decline year-over-year. When you look at this on a return to trend yields —after last year’s record yields were more than a billion bushels lower on production.”

A 7 percent drop however world and U.S. stocks are still very large especially in South America. Meyer says that taking everything into consideration, U.S. corn growers may not see more than this season’s $3.40 a bushel — though he says the range may be $3 to $3.80 with a mid-point of $3.40.

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