CHICAGO, May 10 (Reuters) – The U.S. Department of Agriculture on Friday forecast bigger-than-expected domestic supplies of corn, soybeans and wheat, with outlooks for big harvests and export concerns underpinning the bearish stocks view.
Soybean futures fell to their lowest in more than a decade after the government data was released and wheat sank to its lowest since January 2018. Corn hit a 7-1/2- month low.
“We’re reacting negatively to a negative report,” said Jack Scoville, analyst with the Price Futures Group. “We’ll be done with this report in a few minutes and then we’ll worry what’s going on in Washington and how much corn and soybeans and wheat the government’s going to have to buy to keep the farmer placated as we march forward into the 1970s and 1980s.”
The government pegged U.S. corn ending stocks for the 2019-20 crop year at 2.485 billion bushels, which would be the biggest since 1987-88. It estimated corn production at 15.030 billion bushels, the second biggest ever, based on an average yield of 176.0 bushels per acre.
Corn ending stocks for 2018-19 were seen at 2.095 billion bushels, up from the April estimate of 2.035 billion bushels.
“We’re swimming in grain.” said Don Roose, president of U.S. Commodities. “Now it’s a matter of, as we’re going into planting season, do we get some weather issues that change this. And we definitely need something positive to develop in exports.”
Soybean ending stocks in 2019-20 were seen at 970 million bushels, down slightly from the record 985 million bushels expected in the 2018-19 crop year that ends on Aug. 31.
The outlook for the 2018-19 soybean ending stocks was 100 million bushels bigger than the government’s April estimate and stemmed from a cut of 100 million bushels to its export outlook.
The government’s May report was the first one to provide an outlook for the 2019-20 crop year, which starts on Sept. 1.
Analysts had been expecting 2019-20 ending stocks of 910 million bushels for soybeans and 2.131 billion bushels for corn, according to the average of estimates in a Reuters poll. For 2018-19, analysts had predicted soybean ending stocks of 920 million bushels and corn stocks of 2.055 billion bushels.
USDA estimated wheat ending stocks of 1.127 billion bushels in 2018-19, topping market expectations of 1.097 billion bushels, and 1.141 billion bushels in 2019-20, topping market expectations for 1.060 billion bushels.