Global inventories of corn, wheat and soybeans will be much larger than expected at the end of 2012-13, with much of the increase driven by bigger U.S. supplies and lower Chinese feed demand, says the USDA.
It sharply raised its estimates of ending stocks of the three crops compared with March. Projected corn carry-out was up seven per cent, soybeans up four per cent, and wheat up two per cent. All were larger than analysts had projected.
“World production is going to help plug our gap in tightness in the old crop,” said Don Roose, analyst with U.S. Commodities.
Corn futures prices at the CBOT briefly jumped after the USDA did not raise projected U.S. inventories as much as feared, but gains subsided as traders focused on the bearish world balance sheets. Wheat futures tumbled and soybeans were slightly lower.
The USDA said less corn and wheat is being used as livestock feed in China and the U.S., the world’s top two corn growers.