WASHINGTON (Reuters) —Wheat futures rallied following a U.S. Department of Agriculture report that cut its forecasts for year-end stocks more than expected.
As of Feb. 13 Chicago March futures were the highest since Aug. 23. Gains in Minneapolis spring wheat were less aggressive
It pegged U.S. wheat ending stocks for the 2016-17 marketing year 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.
It cut world wheat ending stocks 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.
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The monthly USDA report disappointed expectations for lower U.S. soybean ending stocks, leaving them unchanged at 420 million bu. It also held its forecast for U.S. soy exports steady at 2.05 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.
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.
“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 lowered domestic corn ending stocks to 2.320 billion bu. from 2.355 billion.
World corn ending stocks were lowered to 217.56 million tonnes from 220.98 million tonnes,
The forecast for Brazil soybean production was unchanged at 104 million tonnes, close to market forecasts. It cut its forecast for Argentina’s soybean harvest to 55.50 million tonnes, down from 57 million a month earlier.
It lowered world soybean ending stocks to 80.38 million tonnes from 82.32 million, mostly due to the reduced forecast for the Argentine harvest.
