The U.S. Department of Agriculture's June report on crop production and grain stocks showed little change to a historically low commodity supply situation.
U.S. wheat stocks on June 1 totaled 306 million bushels, down one-third from a year ago, according to USDA's National Agricultural Statistics Service.
Wheat stocks in the U.S. and worldwide are at record low levels. U.S. farmers increased winter wheat acreage this year by 4 percent and spring wheat acreage by 7 percent, according to USDA estimates.
The market had little reaction to the wheat stocks report, but there was plenty of action in corn and soybean trading, analysts said.
Total corn stocks June 1 were up 14 percent from a year ago, the USDA reported.
Even more surprising was the corn acreage estimate of 87.3 million acres, which was revised upward from a previous USDA estimate, said Mike Krueger, president of MK Commodities in Wilsonville.
The latest estimate represents a 7 percent decline in corn planted area from last year, but it's still the second-highest acreage since 1946.
"USDA came out with considerably higher planted acreage than they had used before," Krueger said. Not surprisingly, corn was "hit hard" in trading, he said.
The agency also adjusted upward its estimate of harvested acreage this year. Analysts greeted that with skepticism given all the rain and flooding that has occurred in the Midwest, Krueger said.
"All this bad weather they've had back there has raised all kinds of acreage and yield questions," he said.
While commodity markets will remain volatile, prices should remain relatively strong, Krueger said.
"Demand still wants to grow," he said. "We still want more corn for ethanol and (soy) beans for biodiesel."
The commodities markets will be sensitive to production issues this year, he said.
"If there are major problems with either corn or soybeans, we've got a nasty situation," he said.
Dan Steiner, a Boardman grain merchandiser, said Kruger's assessment is right on.
"The USDA numbers for corn are being looked with a high degree of skepticism, he said.
As for wheat, the bulk of U.S. stocks that remained on June 1 were held off the farm. At 280 million bushels, that was 27 percent below levels of a year ago.
Just 25.6 million bushels remained in on-farm storage, a 65 percent decline from June 1, 2007.
Total wheat stocks in the Pacific Northwest, including both on-farm and off-farm storage, stood at 38.3 million bushels on June 1, a decline of 15 percent from last year.
Wheat stocks in Washington state totaled 23.2 million bushels, down 11 percent from a year ago. Oregon wheat stocks, at 6.8 million bushels, were 2.5 million bushels below levels of a year ago, down 27 percent.
In Idaho, wheat stocks on June 1 totaled 8.29 million bushels, down 13 percent from a year ago.