USDA Report Reaction

A pretty predictable set of numbers from the USDA really, it was always going to be highly unlikely that they'd cut global wheat production collectively by as much as individual estimates have been showing.

They have a long history of being slow to react to rapidly changing production, whether in the US or abroad, so why should this time be any different.

If you want the real production numbers from the USDA then come back in twelve months time, they might be a bit closer by then.

In the US, record wheat yields will offset this year's low plantings. Increasing production there and finding a further 2.5 MMT in China helped partially offset reductions in Europe, Russia, Kazakhstan and Canada. Certainly output in the first two mentioned is probably still significantly overestimated at 141.82 MMT and 53 MMT respectively.

Overall, when taken at face value, the numbers are mildly bearish.

Strong soybean demand from China is underlined by them buying more new crop soybean today, and the news that they imported a record 6.45 MMT in June. They also showed up as buying a cargo of US corn in the weekly export sales report too.

Early calls for this afternoon's CBOT session: Corn called 3 to 5 lower; Soybeans called 5 to 7 lower; Wheat called 7 to 10 lower.