Markets fall following USDA corn and wheat predictions
Another USDA report has been and gone without providing any fodder for the bulls. Instead, the report shocked the market by increasing the US corn and wheat output and markets tumbled to lower limits by close of play on Monday. The biggest surprises were the acreage and yields for corn. The acreage was only reduced to 90 million acres (a smaller drop than most were expecting) and yield was increased from last month's report, despite a disastrous planting campaign. It feels as though the corn story has been one of the only factors supporting global feed prices and this set of figures goes a long way to dispelling those concerns. However, the fact remains; we will not know the extent of US corn losses until crops are harvested and in the barn.
Domestically, harvest progress has been halted due to widespread unsettled weather but early yields are very encouraging, with most comfortably above the 5-year average. If this pattern continues nationally then it is possible the UK wheat harvest could be upwards of 15.5 million tonnes. Export bids in the south of the country continue to set the floor for domestic feed wheat prices but UK wheat will need to remain competitively priced in order to prevent a huge carryout next summer. Early quality has also been good and there are currently no concerns but, with a mixed weather forecast for the next two weeks, this remains a point to watch in the UK and throughout the EU.