Wheat prices reacted quickly, dropping to less than $7 a bushel.
Global wheat supplies are now forecast to rise by 2.9 million tons, primarily as a result of revisions to previous totals
The season-average price for corn was lowered to a range of $6.65 to $7.15 a bushel, and corn prices did not move much, currently trading at around $6.45 a bushel. As with the wheat crop, lower use of corn for animal feed is lower and domestic consumption is expected to fall by 100 million bushels. Ethanol production (for motor fuel) offset an even larger decline.
The lower use of corn and wheat for animal feed in the U.S. reflects the lower number of cattle being fed as producers have culled their herds to keep the higher costs for feed from mangling their profits. As a result, stockpiles have grown and prices have dropped. A near-record amount of expected corn planting this spring will put even more pressure on corn prices in the coming months.
The April WASDE report is available here.
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