Washington | Reuters — Stockpiles of U.S. soybeans and wheat are expected to rise due to lower export demand amid heightened competition from rival global suppliers, government data on Tuesday showed.
In a monthly supply and demand report, the U.S. Agriculture Department (USDA) raised its ending stocks forecast for domestic wheat and soybeans, and trimmed its supply view for corn due to rising usage from the ethanol sector.
Soybean futures on the Chicago Board of Trade fell to session lows after the data was released, but later recovered those losses. Corn and wheat futures were slightly higher.
USDA pegged soybean 2017-18 ending stocks at 445 million bushels, up 20 million bushels from its November outlook. It lowered its export forecast for the oilseed by 25 million bushels and raised seed usage by five million bushels.
U.S. soy exporters have seen a slow start to the marketing year, with the pace of shipments lagging well behind what is needed to meet USDA’s bullish projections. Plentiful supplies from South American producers Argentina and Brazil have provided overseas buyers with alternatives to U.S. soybeans.
“South America had a huge crop and they’ve been flipping them into the market,” said Karl Setzer, analyst with MaxYield Cooperative in West Bend, Iowa.
“The USDA had been expecting a three per cent (annual) increase and today’s numbers show us that USDA is reconsidering that,” he said.
For wheat, U.S. ending stocks for 2017-18 were seen at 960 million bushels, up from the 935 million bushels forecast in the government’s November report.
A surplus of Canadian supplies following a bigger-than-expected harvest in that key competitor has cut into demand for U.S. exports.
USDA lowered its 2017-18 domestic wheat export outlook by 25 million bushels to 975 million bushels. It raised its estimate of the Canadian wheat crop by three million tonnes, to 30 million.
Domestic corn ending stocks for 2017-18 were cut to 2.437 billion bushels from 2.487 billion bushels. USDA raised its forecast for corn used for ethanol in the marketing year to 5.525 billion bushels from 5.475 billion bushels.
USDA cited increased sorghum exports as the reason for more corn being used for ethanol.
Analysts had been expecting corn ending stocks of 2.478 billion bushels, soybean ending stocks of 438 million bushels and wheat ending stocks of 938 million bushels, according to the average of estimates given in a Reuters poll.
— Reporting for Reuters by Mark Weinraub in Washington, D.C.; additional reporting by Karl Plume in Chicago.