Oil report

UPDATE 2-USDA cuts domestic corn, soy supplies to smallest since 2013/14

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CHICAGO, Nov 10 (Reuters) - U.S. corn and soybean stockpiles this marketing year will fall to their smallest in seven years due to reduced harvest expectations and strong exports, the government said on Tuesday.

The stocks figures were smaller than expected and analysts said supplies could tighten further as overseas buyers look to hoard commodities and secure their food supplies as COVID-19 cases rise globally, spurring fears of supply chain disruptions.

“Crops keep getting smaller and ending stocks keep getting smaller,” said Don Roose, president of brokerage U.S. Commodities. “This now puts huge importance on South America getting a big crop.”

Chicago Board of Trade soybean futures surged to their highest since July 5, 2016, while corn futures hit their highest since Aug. 9, 2019.

In its monthly World Agricultural Supply and Demand Estimates report, the U.S. Agriculture Department pegged 2020/21 U.S. corn ending stocks at 1.702 billion bushels and soybean ending stocks at 190 million bushels. The U.S. corn harvest was seen at 14.507 billion bushels and the soybean harvest at 4.170 billion bushels.

Rising export demand from China and South Korea also pressured corn’s balance sheet. USDA boosted its outlook for U.S. corn exports by 325 million bushels to 2.650 billion.

It raised its 2020/21 corn import projections for China to 13 million tonnes from its previous outlook of 7 million tonnes.

“They finally got in the real world with China,” said Jim Gerlach, president of A/C Trading. That’s too low, but at least they’re finally headed in the right direction.”

Earlier this month, a USDA attache report from Beijing said it expected China to import 22 million tonnes of corn, amid a surge in animal feed demand and after storms and drought damage tightened domestic supplies.

Analysts had been expecting corn stocks of 2.033 billion bushels and a harvest of 14.659 billion bushels, according to the average of estimates in a Reuters poll. Traders estimated soybean stocks of 235 million bushels and a harvest of 4.251 billion bushels. (Additional reporting by Karl Plume and Tom Polansek; Editing by Caroline Stauffer, Chris Reese and Paul Simao)