Carryout stocks of corn, soybeans, and wheat continue to get larger both at home and around the globe, according to USDA’s latest World Agricultural Supply and Demand Estimates, released Tuesday.
“There is nothing supportive in these numbers. The report did not shed much bullish light on these markets,” said Brian Basting of Advance Trading, Bloomington, Ill., and the commentator on a post-report MGEX press call. “All of the numbers underscore the ample supplies of corn, wheat, and soybeans in the U.S. and around the world.”
Corn Faces Stiff Export Competition
USDA raised its forecast for 2015-16 U.S. corn ending stocks by 35 million bushels to 1.837 billion bushels, well above the average trade estimate of 1.809 billion bushels. USDA raised its estimate of corn used in ethanol by 25 million bushels and increased imports by 10 million bushels, but lowered its forecast for exports by 50 million bushels.
“Reduced exports reflect competition from Brazil, and the corn import number is a refection of the availability of the South American supply,” said Basting.
USDA narrowed its projected range for the season-average farm corn price by 5 cents on both ends of the range to $3.35 to $3.85 per bushel.
Looking globally, USDA lowered its forecast for 2015-16 world ending stocks of corn to 208.81 million metric tons, down slightly from last month’s estimate but higher than the average trade estimate of 208.25 million metric tons.
Soybean Price Estimate Unchanged
USDA put U.S. soybean ending stocks for 2015-16 at 450 million bushels, which is 10 million bushels higher than last month’s estimate and 5 million bushels stronger than the average trade estimate. USDA lowered its crush estimate by 10 million bushels to 1.88 billion bushels to reflect lower expected soybean meal exports. USDA left the projected 2015-16 season-average soybean price range unchanged at $8.05 to $9.55 per bushel.
USDA raised its global ending stocks estimate for soybeans to 80.42 million metric tons from last month’s estimate of 79.28 million metric tons. The new forecast was higher than the average trade estimate of 78.97 million metric tons.
U.S. Wheat Carryout Largest Since 2009-10
U.S. wheat ending stocks of 966 million bushels are the largest since 2009-10 and well above the average trade estimate of 947 million bushels.
USDA dropped hard red spring wheat exports to 255 million bushels, down from last year’s 270 million bushels. The carryout for hard red spring wheat was raised 10 million bushels to 278 million bushels, which is 31 percent larger than last year.
“We have had back-to-back bumper crops, and there is strong export competition from Canada, so we are building hard red spring wheat stocks substantially,” Basting said.
USDA also lowered its export forecast for hard red winter wheat by 5 million bushels. Carryout was increased by 4 million bushels to 429 million bushels, up 46 percent from last year’s 294 million bushels.
“There is exceptionally strong competition from the Black Sea region for hard red winter wheat,” said Basting.
USDA increased global ending stocks of all wheat by 6.8 million tons to a record-large 238.9 million tons, well above the average trade estimate of 231.48 million metric tons and the previous estimate of 232.04 million metric tons.
South American Corn Production Raised
USDA raised its forecast for Argentina corn production to 27 million metric tons from last month’s 25.6 million metric tons. The forecast was also higher than the average trade estimate of 25.34 million metric tons. Brazil corn production was increased 2.5 million metric tons from last month’s estimate to 84 million metric tons, higher than the average estimate of 81.51 million metric tons.
USDA increased Argentina soybean production to 58.5 million metric tons, higher than the average estimate of 56.91 million metric tons and last month’s estimate of 57 million metric tons. Soybean production in Brazil was unchanged at a record-large 100 million metric tons, which was slightly higher than the average trade estimate of 99.43 million metric tons.
“We have substantial competition ahead of us, unless there is a late-season weather event,” said Basting.