U.S. soy supplies surge, winter wheat acreage falls to 110-year low
U.S. soybean supplies as of Dec. 1 were the biggest on record as demand for the oilseed fizzled amid a trade war between the United States and China, the U.S. Agriculture Department said.
USDA also said that farmers seeded the smallest winter wheat area – 31.290 million acres – since 1909. An abundance of cheaper supplies around the globe has made U.S. wheat less desirable to overseas buyers in recent years.
Soy supplies ballooned even though the government trimmed its estimate of the U.S. crop harvested last fall to 4.544 billion bushels from its previous forecast of 4.600 billion bushels.
Soybean stocks as of Dec. 1 stood at 3.736 billion bushels. That compares with 3.161 billion bushels a year earlier, which had been the record. Analysts had expected soybean stocks of 3.743 billion bushels, according to the average of estimates in a Reuters poll.
The reduction to the soybean harvest caused USDA to lower its forecast for 2018-19 U.S. ending stocks by 45 million bushels to 910 million bushels, which would still be the biggest on record. USDA also lowered its soybean export forecast by 25 million bushels, to 1.875 billion.
“For soybeans, this was really just a punt,” said Ted Seifried, chief market strategist for Chicago-based Zaner Ag Hedge. “We’re right back in the position of it all depends on what happens with the trade deal.”
Corn stocks as of Dec. 1 fell to 11.952 billion bushels from 12.567 billion bushels a year earlier, below the average forecast for 12.092 billion.
The U.S. corn crop harvested last fall was cut to 14.420 billion bushels, based on a yield of 176.4 bushels per acre. That compares with the government’s previous estimate of 14.626 billion bushels on a yield of 178.9 bushels per acre.
Chicago Board of Trade corn futures, which had been trading in positive territory before the report was released, briefly spiked to their highest since Jan. 23 before turning lower. Soybean futures showed little reaction to the report.
“We’re right to be back to watching progress on trade talks and South American weather,” said Terry Reilly, senior commodities analyst with Futures International in Chicago.
Dec. 1 wheat stocks were 1.999 billion bushels, up from the year-earlier figure of 1.873 billion bushels. Analysts had expected wheat stocks of 1.957 billion bushels.
Source: Reuters (Additional reporting by Karl Plume in Chicago; Editing by Tom Brown and Dan Grebler)