Grain and oilseed futures are down Wednesday morning after the U.S. Department of Agriculture increase its estimates of world grain supplies.
However, they did not give back all the gains made in Tuesday’s sharp rally.
At about 10:25 AM Saskatoon time, November canola was trading at $530.90 per tonne, down $4.30 or 0.8 percent, from Tuesday’s close. Yesterday it rose $16.60 per tonne.
December corn is down about two percent and November soybeans are down about a half a percent.
In almost all crop categories, the USDA says there is a little more grain available than had been expected last month. Production problems in the U.S. this year are more than made up by production increases in the former Soviet Union, China and Australia.
In the U.S., an upward revision in corn carry in stocks more than offset a slight decline in the 2011-12 crop.
USDA kept its corn yield estimate at 148.1 bushels per acre but lowered its harvested acreage to 83.9 million acres from 84.4 million in the previous report.
It also slightly reduced its forecast for corn exports.
The result is a forecast for year end stocks of 866 million bushels, up from 672 million in the September report.
However, that is still down from last year’s 1.13 billion bu.
Globally, USDA raised its forecast for Chinese corn production by four million tonnes to a record 182 million tonnes. It also raised its production estimates for corn production in the former Soviet Union.
In soybeans, USDA slightly lowered its domestic production forecast to 3.06 billion bu. from 3.085 billion. It also lowered its carry in stocks.
Its forecast for year end stocks was lowered to 160 million bu. down from 165 million in the September report and down from last year’s 215 million.
In wheat, it lowered U.S. production but that was more than offset by increased estimates of European, Australian and Kazakhstan production. It also lowered its forecast for world wheat consumption.
Global ending stocks of wheat were increased to 202.37 million tonnes from 194.59 million in the September report. Last year’s global ending stocks were 195.6 million tonnes.
USDA put the domestic hard red spring wheat crop at 405 million bu., down from the September estimate of 475 million and 570 million last year.
USDA pegged domestic durum production at 52 million bu., down from the September estimate of 57 million and 106 million last year.
It put oats production at 54 million bu., down from 57 million in September and 81 million last year.
U.S. canola production was also hammered lower due to weather challenges in North Dakota. USDA pegged production at 694,980 tonnes, down from 1.11 million tonnes last year.
