By Ros Krasny
WASHINGTON, July 11 (Reuters) – The United States government forecast on Friday abundant U.S. and world grain, soybean and cotton supplies in the coming year, consistent with the recent steep decline in prices.
Although futures markets have braced for bearish reports, Chicago markets tumbled again.
“This report does not really tell us all that much that we do not already know,” said Sterling Smith, futures specialist at CitiGroup. “The report confirms a bearish sentiment. It does not bring anything new to the table really.”
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The U.S. Department of Agriculture’s projected 2014-15 U.S. corn carryout, or ending stocks, which is the amount of the crop left over after all demand has been satisfied, was 1.801 billion bushels, which was above analysts’ average forecast.
USDA forecast the corn crop at almost 13.9 billion bu., not much below the record high of 13.925 billion bu. harvested last year.
Old-crop U.S. corn feed usage was lowered, but corn used to produce ethanol was projected 25 million bu. higher, based on the blistering pace of production to date.
U.S. soybean ending stocks for 2014-15 were pegged at 415 million bu., close to trade expectations. If realized, that would be the highest since 2006-07.
USDA will not survey the corn and soybean crops until August. Pending that report, it left projected yields unchanged from its June estimate, but suggested higher yields could be at hand if the weather cooperates for several more weeks.
“Favourable early July crop conditions and weather support an outlook for record yields across most of the Corn Belt, however, for much of the crop, the critical pollination period will be during middle and late July,” USDA said.
At the start of this week some 75 percent of corn was rated in good to excellent condition, and development was moving ahead at a normal pace. For soybeans, 72 percent was in good or excellent condition this week.
“There was nothing positive. Leaving the yields unchanged tells you that this can get more bearish if weather is favourable,” said Don Roose, analyst at U.S. Commodities in West Des Moines, Iowa.
For now, most of the Corn Belt has ample moisture to support crop development.
“This situation is bearish for soybeans and will become bearish for corn when USDA recognizes the yield changes,” said Rich Nelson, analyst at Allendale Inc.
USDA now sees the total U.S. wheat crop at 1.992 billion bushels, down six percent on the year but up 50 million bushels on the month, bolstered by a big spring wheat crop.
Projected season-average prices for wheat, corn and soybeans were all lowered as USDA caught up with the sharp price drops seen in markets recently.
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World soybean ending stocks will jump to 85.3 million tonnes in 2014-15 from 67.2 million in the current season. Projected imports by China were raised by one million tonnes to 73 million, accounting for fully two-thirds of global demand.
USDA increased its estimates for world corn and coarse grain ending stocks for 2013-14 and 2014-15 substantially as well.
It lifted China’s corn crop by two million tonnes to 222 million, keeping China’s imports for the 2014-15 season at a slim three million tonnes.
It raised Australia’s wheat crop for 2014-15 by 500,000 tonnes to 26.0 million, based on rising acreage forecasts.
New-crop wheat consumption estimates were also raised for the European Union, Ukraine and Serbia. Imports were lowered for Egypt and Mexico but raised for Sudan, Indonesia and Nigeria.
