(Updated with quotes, prices)
By Ros Krasny
WASHINGTON, April 9 (Reuters) – Projected U.S. corn and soybean ending stocks for 2013-14 continues to shrink, providing little buffer against any problems with this year’s crops, the U.S. Agricultural Department said Wednesday.
Other highlights of the monthly report were a one-million-tonne cut to Brazil’s soybean crop, increases to both U.S. and global wheat stockpiles, and a jump in global corn production.
The figures spurred a short-lived rally in corn futures , which reached their highest since late August before subsiding. Soybean futures were up about one percent after surging to the highest since July. Wheat futures traded almost two percent lower
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Citing export demand, USDA lowered U.S. corn ending stocks, or carryout, by 75 million bushels to 1.331 billion, below the trade guess of 1.403 billion. Barley and oat stocks were also trimmed.
The stocks-to-use ratio for U.S. corn in 2013-14 will be 9.9 percent, the USDA said, down from 10.9 percent forecast in March and 13.7 percent as recently as December.
In general, the lower the ratio, the higher the potential for prices to climb. The season average farm price for U.S. corn was raised by 10 cents per bushel, to $4.60.
“It sets the stage for us for moving into the growing season. Now, I think the market this week will be more linked to the weather forecast,” said Brian Basting of Advance Trading.
Some analysts said the report set the stage for U.S. corn plantings to increase from the 91.7 million acres forecast by USDA last week, as farmers sense bigger profits.
“Guys like planting corn, and now they can make money planting corn. So the reality is, we’re going to plant more corn. I think you can easily add to the corn number another two to four million acres planted, and substantially change the look of the U.S. harvest,” said Mike North of First Capitol Ag.
BARE-BONES SOYBEAN STOCKS
Even after a record crop in 2013, the United States will end the season with a bare-bones 135 million bu. of soybeans on hand, down 10 million on the month.
“They still really haven’t convincingly solved the bean stocks. I think it is going to continue to support the front of the market,” said Art Liming, futures specialist, Citigroup.
Projected soybean exports were hiked by 50 million bu., but imports were raised by 30 million to a record 65 million. USDA cited “prospective large shipments from South America” during the second half of the marketing year.
“One can really question whether U.S. ports can handle 65 million bushels of imports. We’re an export country, not an import country,” said Karl Setzer of MaxYield Co-op. “I think USDA is just toying with stuff to make this (soybean balance sheet) work.”
Brazil’s soybean crop was hit by warm temperatures and limited rainfall in the south through mid-February, USDA said in making a second straight cut to the crop.
CHINA WHEAT IMPORTS DOWN
U.S. 2013-14 wheat carryout was raised by 25 million bu. to 583 million, in line with forecasts. Stocks increases were projected for most wheat classes although soft red winter was lower.
Expected global wheat stocks rose unexpectedly by almost three million tonnes, to 186.7 million, on lower imports.
Chinese wheat imports were cut by 1.5 million tonnes, to seven million, with Australia and Canada bearing the brunt of the smaller purchases. Kazakhstan is picking up extra demand from Russia and Iran, USDA said.
Global corn production was raised by 6.4 million tonnes on the month, to almost 974 million, but rising feed and export demand were forecast to mop up the supplies, and ending stocks fell slightly.
USDA raised Brazil’s corn crop by two million tonnes and South Africa’s output by one million tonnes, in both cases citing recent timely rains.
Higher corn imports were forecast for the European Union, Algeria, Iran, Egypt and Vietnam, with higher exports expected by South Africa, Mexico and Ukraine, among others.
U.S. cotton stocks, and the 2013 crop, were lowered based on USDA’s final cotton ginnings report, and prices were raised.
The carryout of 2.5 million 480-pound bales will be the lowest since 1990-91, USDA said, and the stocks-to-use ratio of 17.5 percent, while still ample, will be a three-year low.
China’s projected cotton imports were raised by one million bales, to 12 million, based on “the likely release of new import quotas,” USDA said.
