UPDATED - USDA Reports: winter wheat area lower than expected

WASHINGTON, Jan 12 (Reuters) – U.S. corn and soybean supplies ballooned to record levels during the last three months of 2015 following bountiful harvests of both commodities and cutbacks in usage, according to government data released on Tuesday.

However, the market has viewed the reports as mildly bullish because some of the numbers came in lower than analysts’ expectations.

The U.S. Department of Agriculture also said that corn and soybean production was smaller than previously estimated.

USDA also said winter wheat seedings fell a bigger-than-expected 7.2 percent to 36.609 million acres due to reductions in both hard red winter and soft red winter wheat. USDA said hard red winter wheat acreage fell across key production areas of the U.S. Plains, including record low seedings in Nebraska.

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Burgeoning wheat supplies, both domestically and globally, have outstripped demand for the grain and weighed on prices.

U.S. corn stocks as of Dec. 1, 2015 stood at 11.212 billion bushels, slightly above the 11.211 billion of December 2014 and the biggest ever for the period. Soybean stocks were 2.715 billion bu., up from 2.528 billion a year earlier and outstripping the previous record of 2.701 billion set in December 2006.

The Dec. 1 wheat stocks figure of 1.738 billion bu. was a five-year high and came in 40 million bu. above market expectations.

That was the bearish news, but other numbers were more positive for prices.

USDA cut its estimate of the U.S. corn harvest for the 2015-16 marketing year to 13.601 billion bu. from 13.654 billion, lowering the average yield per acre to 168.4 bushels from 169.3 bushels.

Soybean production was lowered 51 million bushels to 3.930 billion, with the average yield reduced to 48.0 bu. per acre from 48.3 bu.

USDA left its harvest estimates of the corn and soybean harvests in Brazil and Argentina unchanged.

Domestic corn ending stocks for 2015-16 were surprisingly raised to 1.802 billion bu. from 1.785 billion bu. despite the smaller harvest view, due to a 50-million bu. cut to exports, an increase in imports and a decrease in usage by the food, seed and industrial sector.

U.S. soybean ending stocks were lowered 25 million bu. to 440 million bu., largely due to the cuts in production. The average of analysts’ estimates for soybean stocks was 468 million bu. USDA also cut its forecast for U.S. soy exports to 1.690 billion bu. from 1.715 billion.

U.S. wheat ending stocks were raised 30 million bu. to 941 million, more than analysts were expecting, due to a reduction in feed and residual usage.

USDA lower its global year end stocks forecast for corn and soybeans but raised it for wheat. It slightly increased its wheat production forecast for European Union and former Soviet Union and trimmed the outlook for global wheat feed consumption.

U.S. winter wheat area in million acres