US officials boost ideas of world grain stocks


The US Department of Agriculture unveiled larger-than expected upgrades to world stocks figures in its latest set of monthly supply-and-demand figures.

Big upgrades to the Brazilian corn crop, and the Australian wheat harvest, left massive expectations for stocks by the end of 2016-17.

"It was a riveting report with markets now trading mixed to lower after USDA raised world bean, corn and wheat stocks to new record levels," said Kim Rugel, at Benson Quinn Commodities.

Terry Reilly, at Futures International, said the report was"fundamentally bearish," as "global supplies keep growing".

Heavy Brazilian stocks

World corn ending stocks for 2016-17 were forecast at 222.3m tonnes, up from the 218.19m tonnes forecast last month, and ahead of an average analyst guess of 219.24m tonnes.

The Brazilian corn crop was seen at 86.50m tonnes, compared to average trade expectations of 84.69m tonnes.

"Corn production is raised this month on increases in both area and yield and if realised would be record-high," the USDA said.

"In the Centre-West, first crop corn has had a good start to the growing season while conditions for crop development in most of southern Brazil were favourable during th e month of November.

Big Australian crop

Global wheat production was lifted by 6.5m tonnes, led by the Australian wheat crop, which got a hefty upgrade, by 4.5m tonnes, to a massive 33.0m tonnes.

This would leave the crop up 18% from the previous record, the USDA noted.

Chinese wheat production was lifted by 900,000 tonnes, and EU and Brazilian crops were both raised by 400,000 tonnes.

Australian exports were lifted by 3.5m tonnes.

Although ideas of world wheat consumption was lifted, this still leaves world wheat ending stocks for 2016-17 estimated at 252.14m tonnes, up from the 249.23 forecast last month, and nearly 2m tonnes above analyst expectations.

Heavy soybean stocks

World soybean stocks were forecast at 82.85 m tonnes, up about 1.3m tonnes from last month's forecast, and 1.5m tonnes ahead of analyst estimates.

Global soybean production was raised to 338.00m tonnes from 336.09m tonnes last month.

US soybean ending stocks were seen at 480m bushels, 10m bushels higher than the average of trade forecasts.

"Although early-season soybean exports are sharply higher than a year ago, completion from South America is expected to be strong in the second half of marketing year, limiting US export prospects during the summer of 2017 relative to the prior year," the USDA said.


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