Washington | Reuters — U.S. soybean supplies are seen falling in the upcoming marketing year as domestic usage and exports are expected to remain strong even as production eases, the U.S. Agriculture Department said on Thursday.
Domestic corn and wheat stocks are also expected to drop due to smaller harvests, according to the government’s monthly supply and demand report.
USDA, in its initial estimate of the 2018-19 marketing year, pegged soybean ending stocks at 415 million bushels, down from its forecast of 530 million bushels for 2017-18.
Soybean futures, which had been trading slightly higher throughout the morning, jumped more than one per cent to session highs after the report was released.
Analysts’ forecast for soybean ending stocks had ranged from 400 million to 715 million for 2018-19 and 495 million to 575 million for 2017-18, according to a Reuters survey.
“U.S. soybean ending stocks were a big surprise,” said Rich Nelson, chief strategist at Allendale Inc. “They didn’t cut new-crop exports and implied very strong demand likely based on Argentina for the remainder of the new-crop year.”
For corn, USDA put ending stocks at 1.682 billion bushels for 2018-19 and 2.182 billion bushels for 2017-18, in line with market forecasts.
Wheat ending stocks were seen at 955 million bushels for 2018-19 and 1.07 billion bushels for 2017-18, both of which were above the average of analysts’ estimates.
CBOT soft red winter wheat futures, which were trading close to unchanged, sank nearly two per cent to their lowest since April 30 as the market digested the data.
USDA pegged U.S. winter wheat production at 1.192 billion bushels, down six per cent from a year ago, due to drought in key production states such as Kansas, Oklahoma and Texas. Harvested winter wheat acreage was seen falling to a record low of 24.8 million.
The government estimated the U.S. soybean harvest for 2018-19 at 4.28 billion bushels, down from 4.392 billion a year earlier. Soybean exports were seen rising to 2.29 billion bushels from 2.065 billion, while the domestic crush was projected to rise by five million bushels to 1.995 billion.
The U.S. corn harvest was forecast at 14.04 billion bushels in 2018-19, down from 14.604 billion bushels in 2017-18. Exports were seen falling to 2.1 billion bushels from 2.225 billion bushels.
— Mark Weinraub is a Reuters commodities correspondent based in Chicago; additional reporting by Theopolis Waters in Chicago.