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U.S. wheat futures rose Friday, after the U.S. Department of Agriculture forecast inventories likely will fall to a 16-year low as drought conditions in the Southern Plains are expected to take a sizable amount out of production.
In its latest monthly WASDE report – highly anticipated because it included the first forecast for the 2023-24 crop – the USDA guided for ending stocks of wheat at 556M bushels and production at 1.659B bushels, both below market expectations.
Grain futures surged on the Chicago Board of Trade after the report’s release, with KC hard red winter wheat surging more than 4% and the July contract hitting its highest level since November 25.
CBOT July soft red winter wheat futures (W_1:COM), the most actively traded wheat contract, settled +1.2% at $6.35 per bushel, while July corn (C_1:COM) closed +0.7% at $5.86 1/4 per bushel and July soybeans (S_1:COM) ended -1.1% at $13.90 per bushel.
ETFs: (NYSEARCA:WEAT), (CORN), (SOYB), (DBA), (MOO)
The USDA’s first forecast for corn and soybean production and supplies in 2023-24 came in larger than expected by analysts, with corn production at 15.27B bushels and stockpiles at 2.22B bushels, while soybean production was seen at 4.51B bushels and inventories at 335M bushels.
U.S. grain markets, particularly corn, were hit with heavy selling for most of this week.
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