U.S. stocks are at an eight year high, while a large South American harvest is expected
WASHINGTON, D.C. (Reuters) — Last year’s record U.S. soybean harvest was even bigger than expected, pushing domestic supplies to their highest in eight years ahead of what is expected to be a bumper South American harvest.
The U.S. Department of Agriculture said Jan. 12 that U.S. corn stocks were also a record 11.203 billion bushels as of Dec. 1, despite surprisingly large cuts to its production and yield readings.
U.S. farmers cut their winter wheat plantings by 4.6 percent to 40.452 million acres, which is below the low end of a range of analysts’ forecasts.
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Soybean futures sold off sharply following the report, shedding 2.8 percent to a one-week low, while corn firmed slightly and wheat sank to its lowest since Nov. 26. Soy prices had risen for four of the previous five sessions as traders built up bullish positions on strong export demand.
“Even if China continues the (import) pace that they’re on, they’re not going to make a significant dent in our ending stocks,” said Joe Lardy, a research analyst at CHS Hedging.
“And given that Brazil looks to be pushing out a record crop, we’re going to have adequate ample soybean supplies going forward, so the soybean prices should be going down.”
The USDA pegged the total U.S. soybean crop at a record 3.969 billion bushels, based on an average yield of 47.8 bu. per acre, which is also a record.
The harvest pushed U.S. soybean stocks as of Dec. 1 to 2.524 billion bu., up from 2.154 billion bu. a year ago but below the 2.590 billion bu. predicted by the average of trade forecasts.
The government raised its outlook for Brazil soybean production by 1.5 million tonnes to a record 95.5 million tonnes. Production in Argentina was left unchanged at a robust 55 million tonnes.
The USDA trimmed its U.S. corn harvest forecast to 14.216 billion bu. from 14.407 billion and the average yield to 171.0 bu. per acre from 173.4.
Analysts had been expecting a corn harvest of 14.349 billion bu. and an average yield of 173.3.
For wheat, the department said farmers seeded 40.452 million acres of winter wheat, below forecasts of 41 to 44 million. Winter wheat plantings were 42.399 million acres a year ago.
The USDA also lowered its outlook for 2014-15 domestic corn ending stocks to 1.877 billion bu., raised its wheat stocks view to 687 million bu. and left soybean stocks unchanged at 410 million bu.
