Washington | Reuters — U.S. corn and soybean production in 2014 will be even higher than the record forecast a month ago, but somewhat below market expectations, U.S. Department of Agriculture data showed on Friday.
USDA made surprise cuts to U.S. and global wheat ending stocks for 2014-15, pushing wheat futures up 1.2 per cent, while corn fell 2.5 per cent and soybeans eased one per cent.
Domestic wheat stocks at 654 million bushels reflected higher projected exports and feed usage.
At 14.475 billion bushels, the U.S. corn crop marginally trailed average estimates, as did projected yields and harvested acreage.
“It’s not ‘bullish,’ it’s just ‘not bearish.’ The USDA did make modest reductions in harvested area, and they didn’t ramp up the yields as much as expected,” said Charlie Sernatinger of ED+F Man Capital.
USDA estimated the U.S. soybean crop at 3.927 billion bushels, up 17 per cent on the year but below trade expectations averaging 3.976 billion.
“If you take the numbers at face value, they’re somewhat supportive. The problem is everybody’s going to be expecting another revision higher in the November crop report,” said Jim Gerlach, president of A/C Trading.
At the start of this week, 74 per cent of corn and 73 per cent of soybeans were rated in good to excellent condition. Harvest has progressed at slightly slower than normal so far.
Overall corn yields will be a record 174.2 bushels per acre, with 22 states expected to post new yield marks.
Soybeans were also in great shape. Compared with final pod counts for 2013, pod counts are up in seven of the 11 published states, USDA said. Twelve states are heading toward record high soybean yields, including No. 1 producer Illinois.
Projected U.S. season-average prices for corn were lowered by 10 cents per bushel, to a midpoint of $3.40. Expected corn usage was nudged up by 50 million bushels on higher projected meat production.
Expected U.S. beef and pork production for 2015 were both raised. Pork output will nudge above beef output for the first time since 1952, a USDA official said.
“The big surprise”
USDA lowered its 2014-15 world wheat ending stocks forecast to 192.6 million tonnes, despite somewhat larger crops in the European Union, Pakistan and Ukraine.
Australia’s crop was lowered by 500,000 tonnes “on continued dryness in portions of the southeast,” and Argentina’s crop slipped 300,000 tonnes on overly wet conditions,
“They cut those (wheat) stocks quite a bit. That’s probably the big wake-up call in the report and that’s why we’re up 10 cents. That, to me, is the big surprise,” said Jack Scoville, analyst at Price Futures Group.
Corn production was cut for Ukraine, Belarus and Russia as harvested results showed the impact of hot, dry late-summer conditions, but was partially offset by larger EU and U.S. crops.
— Ros Krasny is Reuters’ editor-in-chief for commodities, energy and companies news in Washington, D.C. Additional reporting by Reuters’ Chicago commodities desk.