Washington | Reuters — U.S. corn and soybean supplies ballooned to record levels during the last three months of 2015 following bountiful harvests of both commodities and cutbacks in usage, according to government data released on Tuesday.
But grain stocks lagged market forecasts, and corn and soybean production was smaller than previously estimated, the U.S. Agriculture Department said.
“The thought was that big crops get bigger and they actually reduced the production for (U.S.) beans and corn and pulled back the yields as well,” said Dax Wedemeyer, analyst with U.S. Commodities.
Chicago Board of Trade soybean futures, which were trading lower before the report was released, surged to their highest since Dec. 7. Corn and wheat futures also rebounded into positive territory.
Wheat generated strength from the USDA’s estimate that winter wheat seedings fell a bigger-than-expected 7.2 per cent to 36.609 million acres, a six-year low.
“We might have a better longer-term wheat price situation than we thought,” said Rich Nelson, analyst with Allendale Inc.
U.S. corn stocks as of Dec. 1, 2015 stood at 11.212 billion bushels, slightly above the 11.211 billion a year ago and the biggest ever on that date in any year. Soybean stocks rose to 2.715 billion bushels from 2.528 billion a year earlier, beating the previous record of 2.701 billion set in December 2006.
The Dec. 1 wheat stocks figure of 1.738 billion bushels was a five-year high that exceeded market expectations by 40 million bushels.
USDA cut its estimate of the U.S. corn harvest for the 2015-16 marketing year to 13.601 billion bushels from 13.654 billion, lowering the average yield per acre to 168.4 bushels from 169.3 bushels. Soybean production was lowered 51 million bushels to 3.93 billion, with the average yield reduced to 48 bushels per acre from 48.3.
Domestic corn ending stocks for 2015-16 were surprisingly raised to 1.802 billion bushels from 1.785 billion bushels despite the smaller harvest view, largely due to a 50 million bushel cut to exports.
U.S. soybean ending stocks were lowered 25 million bushels to 440 million bushels. The average of analysts’ estimates for soybean stocks was 468 million bushels. USDA also cut its forecast for U.S. soy exports to 1.690 billion bushels from 1.715 billion.
U.S. wheat ending stocks were raised 30 million bushels to 941 million, more than analysts had expected, due to a reduction in feed and residual usage.
— Mark Weinraub is a Reuters correspondent covering grain markets, based in Chicago. Additional reporting for Reuters by Julie Ingwersen and Tom Polansek in Chicago.