Today, we got the USDA’s first projections for the 2018/19 crop. In addition to giving grain markets an idea of what production numbers are going to be around the world, they also gave us a look at the demand side.
For wheat, the USDA doesn’t actually provide a projection until later in the growing season but, given the focus being around production, we took our own stab at the production.
This year, the USDA is estimating that American farmers will plant 12.6 million acres of wheat. Historically speaking, 96.6% of the planted acres of wheat gets harvested, which means that this year, it can be postulated that American farmers will combine 12.2 million acres of wheat.
Using the average yield of the last 5 years of 45.7 bushels per acre, it can be forecasted that the American farmer will produce 15.2 million tonnes of wheat. Compared to last year’s production 11.3 million tonnes, this would mean that this year’s American wheat harvest will be 33.8% higher.
The combination of higher acres and higher yields are the guilty culprits behind the major increase in production. While it’s still early in the growing season, it’s very possible that this production estimate could come down as less acres than intended actually get seeded in the US.