Many wheat traders were surprised by USDA's wheat production forecasts.

Gary Crawford and USDA Chief Economist Seth Meyer.

Transcript

The USDA is out with its new production forecast for wheat crops.

Clearly across the board we saw increases in wheat production estimates and honestly for a lot of them at the upper end or outside of the range of trade estimates.

USDA Chief Economist Seth Meyer, USDA is forecasting winter wheat production at 1.34 billion bushels.

That's up 4 percent from its previous forecast, 7 percent from last season.

That would make it the biggest winter wheat crop since 2016.

USDA is also predicting bigger crops of durum and other spring wheat with however the expected drop in prices.

And I think that those prices are visible within the market now as the market's saying “hey supplies are adequate and we're going to bid the price lower.”

Right after USDA issued its wheat forecasts, prices fell by 18 cents, about a 3 percent drop.

Gary Crawford for the U.S. Department of Agriculture.