The Agriculture Department estimates U.S. winter wheat production will drop 8% this year due to a drought gripping the Plains and that planting delays are likely to cut the corn harvest.
USDA on Thursday projected this year’s corn crop at 14.5 billion bushels, a drop of 4.3% from last year.
The department said 2022 corn yields are likely to be reduced because of the “very slow start to this year’s planting in the major corn producing states and the likelihood that progress by mid-May will remain well behind normal.” USDA estimates just 22% of the corn crop had been planted by last Sunday, compared to the five-year average for that date of 50%.
In its first survey-based forecast of the winter wheat crop, USDA estimated production this year at 1.17 billion bushels, down from 1.28 billion bushels in 2021.
Much of the southern Plains is experiencing extreme to exceptional drought, and farmers are expected to abandon the largest number of winter wheat acres since 2002 despite the global supply crunch due to the war in Ukraine.
Kansas is forecast to produce just 271 million bushels this year, down from 364 million last year, while the Oklahoma harvest is projected at 60 million bushels, down from 115 million in 2021. Texas production is expected to fall to 41.6 million bushels from 74 million last year.
Spring wheat, production of which is heavily concentrated in the northern Plains, is expected to be higher this year, but U.S. wheat supplies are still expected to fall 3% during the 2022-2023 marketing year that starts June 1.
Global wheat production is forecast to fall 4.5 million tons to 774.8 million tons for the 2022-2023 marketing year; USDA anticipates lower production in Ukraine, Australia and Morocco will only be partially offset by increases in Russia and North America.
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Ukraine’s wheat production is forecast by USDA at 21.5 million tons for 2022, down 11.5 million from last year, while corn production is expected to plunge to 19.5 million metric tons, down from 42.1 million last year.
Arlan Suderman, chief commodities economist for StoneX Group, said USDA's projections for Ukraine production were higher than he expected, but still “very reasonable.”
U.S. soybean production is estimated to reach 4.64 billion bushels this year, up from 4.4 billion in 2021, mostly because of an increase in planted acreage.
USDA expects the average farm-gate price of corn to jump to $6.75 a bushel for the 2022 crop, which would be the highest level since the price averaged $6.89 in 2012. The estimated average for the 2021 crop is $5.90 a bushel. Soybean prices are expected to average $14.40 a bushel for 2022, up from $13.25 for the 2021 harvest.
The farm-gate price for the 2022 wheat crop is expected to average a record $10.75 per bushel, up $3.05 from the estimated average for the 2021 harvest.
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