The Good: Nearby spring wheat futures moved up by over three per cent today on news from the USDA that total wheat production and wheat stocks were lower than anticipated. The spring wheat December futures contract closed at US$5.425 per bushel which pushed the contract back into the upper end of the five month trading range. The move in spring wheat was less impressive when compared with Kansas City and Chicago wheat contracts which rallied by 4.1 t0 7.9 per cent. Stronger corn futures also added to the bullish mix for wheat in todays trading action. Canola is an honourable mention today as the market climbed by C$8.40 to C$8.80 per tonne.
The Bad: It was not all good news for spring wheat in the USDA small grains report as other spring wheat production increased to 586 million bushels from 577 million bushels in the September report. Most of the increase was in soft white spring wheat as production of HRS wheat remained unchanged at 530 million bushels. This means that the ending stocks projections in the October WASDE report are unlikely to change for spring wheat from the current 293 million bushel record level.
The Ugly: Corn was up by 14.5 cents in trade today on higher ending stocks for the 2019-20 crop year. This is good news, but the EIA report on ethanol production was bearish for domestic corn use. Ethanol production dropped by 25,000 barrels from the previous week to 881,000 barrels. MarketsFarm still believes that USDA is overly optimistic in regards to corn use for ethanol in the 2020-2021 crop year.