USDA raised world crop production estimates for corn, soybeans and wheat on Wednesday a move that helped push U.S. crop prices lower as market watchers realized there will be plenty of crops for livestock feeders, food companies and biofuel plants around the world.
USDA lowered year-end stocks for U.S. corn and soybeans due to increased corn use to make sweeteners and to more soybeans being exported, but globally it increased grain and oilseed supplies. U.S. soybean ending stocks were cut to 410 million bushels from November's 450 million and corn stocks went to 1.998 billion bushels from November's 2.008 billion.
Wheat stocks were raised to 654 million from November's 644 million due to expected imports from Canada.
In Chicago, soybean futures had the biggest reaction to Wednesday's numbers, briefly dropping about 20 cents a bushel, as USDA hiked global production slightly from November to put the new figure at nearly 10% more than last year's crop.
That forecast followed a report from Brazil earlier on Wednesday, which put that country's soybean crop at a record 95.8 million metric tons. The USDA crop production report on Wednesday kept the Brazil forecast unchanged at 94 million.
"USDA moved a little more aggressively than I expected on its increase in soybean exports, but the big number the market is watching today is the latest estimate of production out of Brazil," Bryce Knorr, Farm Futures senior grain analyst, said of the soybean crop estimate of 95.8 million metric tons coming out of Brazil. "U.S. sales are a record, but there's a huge crop coming on in South America."
USDA said it raised soybean exports to 1.76 billion bushels from November's1.72 billion to reflect "a record export pace in recent weeks and prospects for additional sales and shipments ahead of the South American harvest."
Higher corn production in China and Europe contributed to a larger world crop forecast of 991.58 million metric tons, while the USDA crop report kept U.S. production unchanged from November at 14.41 billion bushels.
Global wheat production was raised 2.3 million metric tons to a record 722.18 million due to increases in Canada and Kazakhstan.
"Wheat still looks like a market waiting for a weather disaster. That should keep rallies in check until the crop begins to break dormancy in the northern hemisphere," Knorr said.
Results from Dec. 10 USDA Crop Report: