June 12, 2018 / 4:28 PM / 2 months ago

CORRECTED-UPDATE 1-USDA sees smaller corn, soy stocks as demand rises

(In 9th paragraph, corrects monthly decline in U.S. corn ending stocks estimate to 80 million bushels instead of 80 billion.)

By Mark Weinraub

WASHINGTON, June 12 (Reuters) - Rising demand on both the domestic and overseas fronts spurred a cut in the U.S. Agriculture Department’s outlook for corn and soybean stockpiles, the government said on Tuesday.

USDA also raised its estimate for 2018/19 U.S. wheat production due to slight increases in all classes of winter wheat. It lowered its forecast for ending stocks that year after boosting its export outlook by 25 million bushels, which traders attributed to a smaller Russian harvest forecast.

Chicago Board of Trade corn, soybean and wheat futures all rallied to session highs after the report was released.

“We have a bullish report here,” said Rich Nelson, chief strategist with Allendale Inc. “Better demand expectations that are supporting pricing.”

In its monthly supply and demand report, USDA pegged soybean ending stocks for the 2017/18 crop year at 505 million bushels, down from 530 million bushels a month ago. It boosted its soybean usage by crushers to 2.015 billion bushels, up 25 million bushels.

For the 2018/19 marketing year, USDA estimated soybean endings stocks at 385 million bushels, down from its May estimate of 415 million bushels, largely due to a smaller carry-in from 2017/18.

The 2018/19 stocks estimates fell below a range of analysts’ forecasts in a Reuters survey. The 2017/18 figure was below the average of estimates in the survey.

High soybean meal usage was sparking demand for soybeans at processors, USDA said.

On the corn front, USDA pegged 2017/18 ending stocks at 2.102 billion bushels, down 80 million bushels from May. That was below the low end of analysts’ estimates.

The government raised its 2017/18 corn export outlook by 75 million bushels to 2.300 billion. USDA said that corn exports in April hit a record high, topping the monthly shipping record set in November 1989.

For 2018/19, corn ending stocks were seen at 1.577 billion bushels. In May, USDA pegged corn ending stocks at 1.682 billion bushels. USDA boosted its 2018/19 ethanol usage estimate to 5.675 billion bushels, up 50 million bushels from May.

USDA also pegged domestic wheat ending stocks at 1.080 billion bushels for 2017/18, up 10 million bushels from May, and at 946 million bushels for 2018/19, 9 million bushels lower than May.

The government raised its estimate of all U.S. wheat production for 2018/19 by 6 million bushels to 1.827 billion bushels.

It cut its 2018/19 Russia wheat harvest estimate to 68.50 million tonnes from 72.00 million tonnes.

Additional reporting by Karl Plume in Chicago Editing by Paul Simao and Marguerita Choy

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