May WASDE report gives wheat a lift

SASKATOON — Wheat markets posted strong gains on May 12 in response to a bullish World Agricultural Supply and Demand Estimates report.

Barchart reports that Chicago wheat jumped 32 to 42 cents, Kansas was up 35 to 45 cents and Minneapolis spring wheat rallied 30 to 40 cents in the immediate wake of the report.

StoneX chief commodities economist Arlan Suderman called the U.S. Department of Agriculture report “a doozy” in his commodity outlook webinar.

All the excitement was surrounding the report’s U.S. winter wheat production estimate of 1.05 billion bushels.

“That’s about 355 million bu. below last year’s number,” said Suderman.

It was also significantly below the average trade estimate of 1.2 billion bu.

Much of that decline came from the hard red winter wheat forecast of 515 million bu., which would be 289 million bu. below last year’s crop.

“That’s a huge decrease,” said Suderman.

The trade was forecasting 629 million bu.

The U.S. Department of Agriculture is forecasting a 132 million bu. drop in production in Kansas, the top state for hard red winter wheat production.

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Suderman noted that the Wheat Quality Council is touring Kansas, southern Nebraska and northern Oklahoma this week.

“We’ll see if they confirm the USDA’s numbers or come up with something different,” he said.

He noted that the USDA’s numbers are as of May 1 and there have been a lot of days since then where temperatures have soared above 90 F, putting more stress on the crop.

The USDA is forecasting a 42 million bu. drop in Oklahoma’s production, a 38 million bu. decline in Texas, a 38 million bu. reduction in Colorado and a 22 million bu. cut in Nebraska.