WASHINGTON, July 10 (Reuters) – The U.S. Department of Agriculture on Friday cut its outlook for the supply of corn and soybeans that will be left over at the end of the 2014-15 marketing year by more than expected, sending futures prices higher.
But new-crop corn and soybean stocks came in above expectations due to expected large harvests of both commodities, the government said.
The USDA sharply increased its outlook for global 2015-16 year end wheat stocks
Investors today are mostly focused on the old-crop corn and soybean shortfalls. Concerns about additional rain in areas of the Midwest that are waterlogged also supported corn and soybeans.
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USDA in its monthly supply and demand report pegged old-crop U.S. soybean ending stocks at 255 million bushels, down from 330 million bu. a month ago and less than the 287 million bu. expected by market watchers. The government raised its estimate of both soybean exports and crush by 15 million bushels.
Old-crop corn ending stocks were cut to 1.779 billion bu. from 1.876 billion due to increased demand from the export and feed sector. The average analyst forecast was 1.811 billion bu.
“The bean carryout at 255 (million bu.) in the old crop is supportive,” said Jim Gerlach, president of A/C Trading. “That’s something real. The rest of this is all speculation on what you think yields will do.”
USDA left its average yield estimates for both crops unchanged – 166.8 bu. per acre for corn and 46 bu. per acre for soybeans – despite a wet spring that has raised concerns about crop development.
Corn ending stocks for the 2015-16 crop year will be 1.599 billion bu., USDA said. Analysts had been expecting new-crop corn stocks of 1.540 billion bu.
Domestic soybean ending stocks for 2015-16 were pegged at 425 million bu., down from 475 million a month ago. The average analyst estimate was 370 million bu.
USDA forecast the 2015-16 soybean harvest at 3.885 billion bu. and the 2015-16 corn harvest at 13.530 billion bu., topping market expectations.
Total U.S. wheat production was pegged at 2.148 billion bu., matching forecasts.
The government trimmed its estimate of U.S. winter wheat production by 49 million bu. to 1.456 billion, making cuts to its estimate of the hard red wheat, soft red wheat, and white wheat harvests.
U.S. wheat ending stocks for the 2015/16 crop year were seen at 842 million bushels, up from 814 million bu.a month ago but lower than analysts’ forecasts.USDA pegged global 2015-16 year end wheat stocks at 219.81 million tonnes, due mostly to a big increase in the carry in.
It trimmed Canada’s wheat crop to 27.5 million tonnes from 29 million in the last report, but that will likely have to be cut in future reports because of the on going drought in much of Western Canada.
USDA raised its forecast for Black Sea wheat production by four million tonnes to 109.88 million tonnes.
That too might have to change in the future as a heatwave in some regions and excess rain in other areas is stressing crops in Ukraine and Russia as the harvest begins.
