Wheat futures prices soared in early trading in the commodities futures markets, and rose to a 7-week high after the United States Department of Agriculture increased U.S. wheat production for the 2016/2017 crop year by 11 million bushels.
The December contract in wheat futures was up .98 percent at $4.10.40 a bushel by mid-day, and after reaching an earlier high of $4.14 in the commodities futures markets.
According to commodities futures markets analyst, the USDA report showed that U.S. ending stocks for 2016/17 were raised 38 million bushels, as reduced supplies are offset by lower projected use. Production for 2016/17 was lowered 11 million bushels, based on the latest estimate from the NASS September 30 Small Grains Annual Summary. Feed and residual use was reduced 70 million bushels to 260 million, and exports were raised 25 million bushels on increased competitiveness of U.S. wheat, particularly in North Africa, where the EU has lost market share due to lower production and quality issues.
Most commodities futures markets analysts predicted production of 15.060 billion of bushels of wheat, while the USDA estimated 15.093. Corn yields estimates were 1.735 bushels harvested in millions of acres, with the USDA estimate of 174.4. In the harvested area, analysts predicted 86.750 versus the USDA 86.550.
The December contract in corn futures was down .36 percent at 3.44.20 by mid-day in the commodities futures markets.
Meanwhile, the so-called “hard” Brexit could see Ukraine take over the UK in wheat exports to the European Union, forcing British cereal farmers to look into Asian markets and possibly, other crops.
In other events of relevance to commodities futures markets, the U.S. Federal Reserve is scheduled to release its September meeting minutes at 2 p.m. ET. Ahead of the minutes' release, New York Fed President William Dudley characterized U.S. inflation expectations as "well-anchored."
Other reports include weekly Mortgage Bankers association data, which showed total mortgage application volume fell 6 percent on a seasonally adjusted basis for the week ended Oct. 7, compared to the previous week.
Weekly job openings dropped nearly 7 percent to 5.4 million, down from 5.8 million in July, according to the U.S. Department of Labor.
In addition, the Treasury Department will hold two key sales Wednesday, auctioning $24 billion worth of three-year notes and $20 billion in 10-year notes.