U.S. corn traded lower on Friday after USDA forecast larger-than-expected U.S. ending stocks of 1.726 billion bushels from this year's harvest and pushed world ending stocks to 181.73 million tonnes, up 8% from the previous year.
Soybean and wheat futures showed little reaction to USDA's latest estimates that included cutting this year's U.S. soybean stocks to a small 130 million bushels from 135 million and cutting the U.S. winter wheat crop to 1.403 billion bushels from last year's 1.53 billion.
"USDA had some interesting numbers, some of them bullish, but the bearish overall reaction is in line with the seasonal trends we've been warning about. The trade tends to focus on the big new-crop corn and soybean numbers, even though these are no surprise," said Bryce Knorr, Farm Futures senior grain analyst.
The drop in corn futures came despite USDA slicing this year's ending stocks number to 1.146 billion, from April's 1.331 billion.
"USDA's old-crop corn carryout forecast was even more bullish that we projected, and ours was one of the lowest in the industry," Knorr said of Farm Futures' estimate of 1.246 billion.
The 1.146 billion bushels is still a comfortable cushion. USDA's 165.3 bushels per acre for this year's crop, versus 158.8 a year ago, was not a surprise, he said.
"It is what it is. And it is a warning," Knorr said of the corn. "If the crop gets planted more or less on time and weather is favorable, the crop could be even bigger."
USDA put this year's upcoming U.S. soybean harvest at 3.635 billion bushels, up 9.5 % from last year's, with ending stocks at 330 million, up from this year's expected 130 million.
USDA's estimate of 1.963 billion bushels for total wheat and 1.403 billion for winter wheat, were close enough to trade forecasts there was little reaction in Friday's futures. USDA put this year's hard red winter wheat at 746 million, up from 2013's 744 million, but down from the 841 million expected by Farm Futures and from the 782-million trade estimate.
Soft red winter wheat production was cut to 447 million this year from 2013's 565 million.
The increase in hard red winter comes despite expected sharp declines in Kansas, Oklahoma and Texas, where drought has hurt the crop. Production in Colorado and Nebraska should be up from 2013.