USDA Crop Report Confirms There Will Be More Corn and Soybeans

USDA Crop Report Confirms There Will Be More Corn and Soybeans

Global supplies of corn, soybeans, wheat increased in latest USDA WASDE report

Plentiful supplies of corn, soybeans and wheat in the United States and overseas were predicted by USDA on Friday, with soybean prices taking the biggest hit in Chicago trading after USDA increased U.S. production and stocks forecasts from its June report.

Global ending stocks were increased for corn and soybeans, which had largely been expected, while USDA's larger wheat stocks.may have surprised the analysts looking for a decrease.

Global supplies of corn, soybeans, wheat increased in latest USDA WASDE report

In the United States, USDA expects 140 million bushels of 2013-14 soybean ending stocks, up from its June estimate of 125 million. That was due in part of USDA decreasing residual usage by 69 million bushels.  Corn stocks were hiked to 1.246 billion from June 1.146 billion.

Next year's ending stocks went to 415 million for soybeans from June's 325 million, corn to 1.801 billion from 1.726 billion and wheat to 660 million from 574 million. The wheat and corn numbers exceeded averages of trade estimates, while the soybeans nearly matched them.

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 "These numbers really don't change the market's bearish dynamics at all. Two numbers stand out. First, the big decrease in residual soybean usage – a negative number – reflects a bigger 2013 crop than previous estimates, adding to supplies available for 2014. That just adds insult to injury," said Bryce Knorr, Farm Futures senior grain analyst.

USDA is predicting a record U.S. corn yield of 165.3 bushels per acre.

"Favorable early July crop conditions and weather support an outlook for record yields across most of the Corn Belt, however, for much of the crop, the critical pollination period will be during middle and late July," USDA said of the corn.  "At the projected 13,860 million bushels, this year's crop remains just 65 million bushels below last year's record."

USDA raised 2014-15 corn production for China and Europe. Brazil's was unchanged for 2014-15 at 74 million.

U.S. soybean production was forecast at a record 3.8 billion bushels, up 165 million from USDA's June forecast. An increase had been expected after USDA in June put U.S. soybean acreage at a larger than expected 84.84 million. That acreage compares with 76.53 million a year ago.

In midday Chicago trading, July soybeans, which expire on Monday, fell 80-1/2 cents to nearly $12.49-1/4 per bushel, before recovering some of that loss. New-crop November was down 19 cents at $10.74.

Wheat futures also fell as USDA expects a harvest of 1.992 billion bushels, up from its June estimate of 1.942 billion, with increases forecast for soft red winter and spring wheat. USDA put the spring wheat harvest at 565 million bushels up from 2013's 534 million. USDA did not issue a June spring wheat estimate.

"USDA's wheat estimate was also bearish, for both supply and demand. While I'm not bullish wheat, quality wheat looks like it will be harder to come by in the year ahead, which could eventually help exports," said Knorr. "More U.S. wheat may be suitable only for feed use, also helping tighten carryout a little."

There still seems to be enough wheat to go around on world markets, so Knorr doubts there will be a big recovery in the market unless El Nino effects are more severe than anticipated..

Globally, wheat ending stocks for 2014/2015 were raised to 189.54 million tonnes from June's188.61 million; corn went to 188.05 million from June's 182.65 million; and soybeans to 85.31 million from June's 82.88 million. The new estimates exceeded average trade forecasts.

USDA raised 2014/2015 corn production for China, Europe and Serbia. Brazil's was unchanged for 2014-15 at 74 million.

Download the full USDA report below.

USDA Reports Have Few Surprises, Prices Fall Again

USDA Reports Have Few Surprises, Prices Fall Again

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