US farmers cut winter wheat acreage to 108-year low

US farmers slashed their winter wheat plantings to the lowest in more than a century as supplies of the grain ballooned to a 29-year high, the US Agriculture Department said on Thursday. USDA also dialed back its harvest estimates for the US soybean and corn crops but 2016/17 marketing year production of both commodities remained at record levels. Corn and soybean supplies rose to record levels following the bumper harvest during the fall.
US winter wheat seedings fell to 32.383 million from 36.137 million a year earlier. That marked the smallest winter wheat acreage since 29.196 million in 1909 and the second lowest on record. Analysts, on average, had been expecting winter wheat plantings of 34.139 million, according to a Reuters poll.
Falling wheat prices have caused farmers in key production areas such as the Great Plains to alter their traditional acreage splits. Chicago Board of Trade wheat futures have faallen for four years in a row Wheat futures rallied to a fresh 4-1/2 month high after the report was released.
"Looking at winter wheat acreage down 3.8 million acres, that's a big deal," said Tom Fritz, analyst at EFG Group. Soybeans which had been trading in negative territory turned higher and hit their highest since Dec. 19. Corn firmed to a session high before turning lower.
US wheat stocks as of Dec. 1 rose to 2.073 billion bushels from 1.746 billion a year earlier. That marked the highest December wheat supply base since 1987, when wheat stocks stood at 2.501 billion bushels. Corn stocks as of Dec. 1 were 12.384 billion bushels while soybean stocks were 2.895 billion bushels.
USDA lowered its US corn production estimate for the 2016/17 marketing year to 15.148 billion bushels from its previous estimate of 15.226 billion bushels. Average corn yields were trimmed to 174.6 bushels from 175.3 bushels per acre.
For soybeans, domestic production was pegged at 4.307 billion bushels, down from the government's previous estimate of 4.361 billion bushels, with average yields lowered to 52.1 bushels per acre from 52.5 bushels per acre.
The production cuts caused USDA to drop its US ending stocks outlook to 2.355 billion bushels for corn and 420 million bushels for soybeans. USDA also lowered its outlook for world corn and soybean ending stocks despite forecasts for big South American crops. It raised its Brazil soybean harvest forecast by 2 million tonnes to 104 million tonnes.