Washington | Reuters — The U.S. Agriculture Department 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 sharply higher.
But new-crop corn and soybean stocks came in above expectations due to large harvests of both commodities, the government said.
Corn and soybean futures briefly dipped after the report was released before rallying as investors focused on the old-crop shortfalls. The front-month Chicago Board of Trade corn futures contract surged to its highest since June 30, 2014.
USDA in its monthly supply and demand report pegged old-crop U.S. soybean ending stocks at 255 million bushels, down from 330 million bushels a month ago and less than the 287 million bushels 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 bushels from 1.876 billion due to increased demand from the export and feed sector. The average analyst forecast was 1.811 billion bushels.
“The bean carryout at 255 (million bushels) 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 bushels per acre for corn and 46 bushels 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 bushels USDA said. Analysts had been expecting new-crop corn stocks of 1.54 billion bushels.
Domestic soybean ending stocks for 2015-16 were pegged at 425 million bushels, down from 475 million a month ago. The average analyst estimate was 370 million bushels.
USDA forecast the 2015-16 soybean harvest at 3.885 billion bushels and the 2015-16 corn harvest at 13.53 billion bushels, topping market expectations.
Total U.S. wheat production was pegged at 2.148 billion bushels, matching forecasts.
The government trimmed its estimate of U.S. winter wheat production by 49 million bushels, 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 bushels a month ago but lower than analysts’ forecasts.
— Mark Weinraub is a Reuters correspondent covering grain markets and based in Chicago. Additional reporting for Reuters by Tom Polansek in Chicago.