The wheat crop in Russia is in even worse shape that USDA projected a month ago. They’ve trimmed another 2.5 million tons from their forecast, which puts the forecast for the crop at 42.5 million tons, down from nearly 62 million last season.
"The big cut this month really has to do with harvest reports we've gotten from central growing areas where they were hardest hit by heat and drought this summer," said USDA grain analyst Jerry Norton. "We've not seen any significant improvement in yields as we go through the crop. In a normal year those damaged crops would be harvested first and we would normally expect in the last month to see some improvement but we didn't see any improvement in the crop, actually the yields have trended slightly lower, so that really took more out of the crop than we expected a month ago."
USDA also took 1.5 million tons off its forecast for the European Union. Norton says U.S. wheat stands to benefit from higher than expected exports and higher prices on the wheat market.
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