WASHINGTON, Feb 9 (Reuters) – Soybean futures fell following the monthly USDA report release today, which disappointed expectations for lower soybean ending stocks.
Initially soybeans were down sharply but then partly recovered later in the morning. Canola futures did not react and were trading higher in the morning. Wheat futures rose.
The United States Department of Agriculture left its soybean ending stocks unchanged at 420 million bushels. It also held its forecast for U.S. soy exports steady at 2.050 billion bu. despite a fast pace of shipments through January. On average, the trade expected stocks at 410 million bu., according to a Reuters poll.
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Although exports have been strong to date, the USDA expects slower movement in the rest of the crop year.
“Competition from expected record South American exports will limit U.S. shipments to well below last year’s record level this summer,” USDA said in the report.
Recent strong weekly exports had been supporting soybean prices.
“I think this knocks a little wind out of the sails for now. People who were buying soybeans on the hopes of a bullish report are pulling back a little bit,” said Ted Seifried, analyst at the Zaner Group.
The USDA did lower ending stocks for wheat and corn.
U.S. wheat supplies were seen shrinking below market estimates as the export outlook brightened despite ample global stocks and a firm dollar that had been seen as a brake on overseas demand.
The domestic corn stocks forecast was also lowered as ethanol makers ramped up production.
U.S. wheat ending stocks for the 2016-17 marketing year were pegged at 1.139 billion bu., down from the January estimate of 1.186 billion bu. and below market forecasts that ranged from 1.145 billion to 1.211 billion bu..
Domestic corn ending stocks were lowered to 2.320 billion bu. from 2.355 billion.
The USDA’s forecast for Brazil soybean production was unchanged at 104 million tonnes, close to market forecasts. It cut its forecast for the Argentine soybean harvest to 55.50 million tonnes, down from 57 million tonnes a month earlier.
Analysts, on average, had expected the report to show Argentine soybean production at 54.54 million tonnes and Brazilian soybean production at 104.08 million tonnes, according to a Reuters survey.
World soybean ending stocks were lowered to 80.38 million tonnes from 82.32 million tonnes, mostly due to the reduced forecast for the Argentine harvest.
On the global front, USDA’s estimate of world wheat ending stocks was cut to 248.61 million tonnes from 253.29 million tonnes. USDA cited a cut to harvest expectations in India and Kazakhstan as the reason for the drop.
World corn ending stocks were lowered to 217.56 million tonnes from 220.98 million tonnes, with usage by China, the top consumer of the yellow grain, raised to 231 million tonnes from 227 million tonnes.
