Washington | Reuters –– The U.S. government raised its outlook for domestic corn supplies by less than expected on Thursday, while its lowered projection for soybean ending stocks was in line with market forecasts.
Corn stocks for the end of the 2014-15 marketing year were seen at 1.827 billion bushels, 50 million bushels more than the U.S. Agriculture Department projected in its March supply and demand report. The bump came from a cut to usage in the feed and residual category, as market watchers had expected.
Soybean futures dropped to session lows and the front-month contract hit its lowest since Oct. 21 after the report was released. Corn futures briefly turned higher before retreating to negative territory, holding above pre-report levels.
The government had cut its corn ending stocks view in the five previous monthly crop reports.
A Reuters poll had estimated corn stocks, which USDA still projected at a nine-year high, of 1.854 billion bushels. Analysts had pegged their forecasts to a quarterly stocks report that showed supplies well above expectations as of March 1.
Soybean ending stocks were lowered to 370 million bushels, matching the average of forecasts in the Reuters poll, from the March projection of 385 million bushels. The cut came from increased usage for seed and residual.
“On the face of it, a ‘nothing’ report, we are no smarter now than we were an hour ago,” said Charlie Sernatinger, global head of grain futures at ED+F Man Capital. This is all nuances; now we are right back to a weather market.”
USDA pegged wheat ending stocks at 684 million bushels, down from 691 million bushels in the March report and below market expectations of 692 million bushels.
The government also raised its estimate of corn and soybean production in Argentina, to 24 million tonnes and 57 million tonnes, respectively. It left harvest forecasts in Brazil unchanged, topping analysts’ estimates that had predicted a slight cut to both corn and soybean production in that country.
World ending stocks of soybeans were seen at 89.55 million tonnes, close to forecasts. USDA raised world corn ending stocks to 188.46 million tonnes, above market forecasts. It lowered world wheat ending stocks to 197.21 million tonnes.
USDA raised its outlook for U.S. sorghum exports by 50 million bushels to 350 million, as demand from China surged.
— Mark Weinraub is a Reuters correspondent covering grain markets based in Chicago. Additional reporting for Reuters by Julie Ingwersen in Chicago.