Hopes for price rally dashed | But soybean, corn ending stocks still smallest in years
WASHINGTON (Reuters) — U.S. corn and soybean stockpiles were far larger than expected on the Sept. 1 start of this marketing year and the bigger soybean stockpile will buffer a late start for the fall harvest.
The United States Department of Agriculture also said this year’s wheat crop was one percent larger than traders expected, while wheat stocks on Sept. 1 were three percent smaller than analysts projected.
Chicago corn and soybean futures slumped following the stocks report Sept. 30. December corn fell more than 2.5 percent, blasting to a new harvest-time low. November soybeans also tumbled more than 2.5 percent. Wheat fell less than one percent.
USDA pegged corn stocks at 824 million bushels on Sept. 1, 21 percent more than the average trade estimate, and soybean stocks at 141 million bu., 14 percent larger than the trade expected. Despite the increases, stocks of soybeans were still the smallest in four years and corn stocks the smallest in 16 years.
“Realistically, this adds to an already bearish situation and strengthens the argument for a move down to $4.20 or below,” Rich Nelson, an analyst at Allendale Inc., said of corn.
The USDA estimates, based on surveys of growers and warehouses, were above the highest estimate of any trader in a survey ahead of the quarterly report. They were also bigger than USDA estimates made three weeks ago of 681 million bu. for corn and 125 million bu. of soybeans.
Also in the report, USDA revised its estimate of the 2012 soybean crop to 3.034 billion bu., up 18.6 million bu., or less than one percent. The change was based on an analysis of data from several sources, USDA said.
“It certainly takes away a serious chance to rally to $14 (in soybeans). We now have a cushion for any moves USDA does in a couple of weeks,” Nelson said, looking ahead to the scheduled Oct. 11 crop report.
Tight soybean supplies are expected for the year ahead despite a crop that is forecast to be the fourth-largest ever.
In a companion report, USDA said this year’s wheat crop totaled 2.128 billion bu., up 14 million bu. from its previous estimate and 20 million bu. larger than analysts expected. The crop is slightly smaller than average.
USDA surveyed 66,000 growers as part of its research for making estimates for wheat and other small grain crops and for Sept. 1 grain stocks. For the stocks report, it also surveyed all commercial warehouses.