U.S. Forecasts Domestic Wheat Stockpiles to Fall to 16-Year Low

By Kirk Maltais

Wheat inventories will likely drop to a 16-year low as a drought in the Southern Plains is expected to take out a sizable chunk production, the U.S. Department of Agriculture said Friday.

In its latest monthly world supply and demand report, the USDA forecast that ending stocks of wheat would total 556 million bushels and production would settle at 1.659 billion bushels -- both below the predictions of analysts surveyed by The Wall Street Journal.

"The harvest-to-plant ratio is down from last year with above-average abandonment in Texas, Oklahoma and Kansas," the department said.

The USDA expects stockpiles of corn in the 2023/24 marketing year will total 2.22 billion bushels, while soybean inventories will reach 335 million bushels. Analysts surveyed by The Wall Street Journal had predicted that the USDA would peg new-crop corn stocks at 2.03 billion bushels and soybean stocks at 282 million bushels.

The uptick in ending stocks comes as crop production is expected to rise, with corn forecasted at 15.27 billion bushels and soybean at 4.51 billion bushels.

Friday's report was highly anticipated by traders, since it contained the first forecasts for the 2023/24 crop. After the report's release grain futures on the Chicago Board of Trade surged, led by wheat, which rose as much as 4% before paring back gains to 2.5%.

Write to Kirk Maltais at [e-mail]

(END) Dow Jones Newswires

05-12-23 1248ET