WASHINGTON, D.C., U.S. — The U.S. Department of Agriculture’s September World Agricultural Supply and Demand Estimates report issued Sept. 12 included bearish surprises for wheat and corn.

In the case of wheat, the surprise came in the USDA’s world supply-and-demand forecasts, as there were no changes to the 2018-19 domestic all-wheat outlook. The USDA forecast 2018-19 world wheat ending stocks at 261.29 million tonnes, up 2.33 million tonnes from the August projection but down 13.07 million tonnes, or 5%, from a record 274.36 million tonnes in 2017-18. Pre-report trade estimates averaged 257.58 million tonnes. World wheat production in 2018-19 was forecast at 733 million tonnes, up 3.37 million tonnes from August but down 25.27 million tonnes, or 3%, from a record 758.27 million tonnes in 2017-18.

As expected, the USDA lowered its production forecasts for Australia (down 2 million tonnes) and Canada (down 1 million tonnes), but it unexpectedly raised its estimate for Russian wheat production by 3 million tonnes, to 71 million. With the Russian crop larger than expected, the USDA held its export forecast for Russian wheat in 2018-19 at 35 million tonnes.

In corn, the surprise was a larger-than-expected increase in average corn yield, which had ripple effects across the domestic corn supply-and-demand balance sheet. The USDA forecast the average corn yield at an astounding and record 181.3 bushels per acre, up 2.9 bushels from 178.4 bushels per acre as the August forecast.

The higher yield forecast prompted the USDA to raise its projection for the 2018 crop to 14.827 billion bushels, up 214 million bus from the August outlook. Given the larger forecast supply, the USDA raised its forecast for 2018-19 feed and residual use of corn by 50 million bushels, to 5.575 billion, its food, seed and industrial use of corn forecast by 25 million bushels, to 7.130 billion, and its exports forecast by 50 million bushels to 2.4 billion.

Despite the larger disappearance forecasts, the USDA projected the carryover of corn on Sept. 1, 2019, at 1.774 billion bushels, up 90 million bushels from August and compared with 2.002 billion bushels in 2018.