U. S. corn and wheat stockpiles will swell to their largest size in years as corn exports slow and Americans use less flour, the government said on March 10 in a report likely to influence planting this spring.
Record crops, despite last year’s rain, flooding and snow, are still in the marketing stream. The supplies will pull down prices farmers receive at the same time that record soybean exports, forecast at 1.42 billion bushels this marketing year, undergird futures market prices for the oilseed.
In its last update of crop output and use before releasing its crucial planting intentions report at the end of March, the U. S. Agriculture Department cut its forecast for corn exports by 100 million bushels, due to large crops worldwide.
A USDA survey found small losses from the storm-delayed corn harvest – only 20 million bushels when markets were thinking 60 million bushels or more would be shaved from the production number.
“This will take the wind out of the bullish sails as we head into planting,” said analyst Rich Nelson at consulting firm Allendale, pointing to the survey results.
All told, the corn stockpile will be 1.799 billion bushels when this year’s crop is ready for harvest, said USDA – a seven-week supply, and up 60 million bushels from the previous estimate. The carry-over has topped 1.8 billion bushels only four times in the past 20 years.
Some one billion bushels of wheat – a half-year supply – will be in U. S. grain bins and warehouses when the new crop is mature, up 20 million bushels from USDA’s previous estimate. It would be the largest stockpile since the end of 1987-88.
Wheat exports are flagging, and high flour extraction rates reduce the amount of U. S. wheat needed to make food, said USDA. “At the same time, declining per capita consumption is reducing demand for wheat and flour,” it said.
“So now, not only are we not competitive in the world, we’re not competitive here in the United States,” said Roy Huckabay, an analyst with The Linn Group in Chicago.
Worldwide, wheat, corn and soybean stockpiles are growing, compared with estimates made in February, said USDA. Brazil, No. 2 to the United States in soybeans, is forecast to reap a record 67 million tonnes, up one million tonnes from the previous estimate and 10 million tonnes more than last season.