The US Agriculture Department on Friday unexpectedly raised its forecast for domestic soyabean production, based on projections for record yields in key states such as Iowa, Minnesota and Nebraska. The government lowered its forecast for corn production by more than expected in its monthly supply and demand report. But supplies, while lower than the previous crop year, will still be ample as the corn harvest will be the third largest on record if it matches the government's outlook. Chicago Board of Trade soyabean futures, which had been trading higher for much of the morning, turned lower and hit a 6-1/2 year low after the data was released. Corn futures rallied to a 2-1/2 week high.
"The trade is really trying to wrestle with this," said Arlan Suderman, market analyst for Water Street Solutions. "(Soybean) harvest results so far have been pretty mixed but generally below a year ago while this USDA yield is pretty close to a year ago." USDA pegged soyabean production at 3.935 billion bushels, based on an average yield of 47.1 bushels per acre. Analysts, based on an average of estimates in a Reuters poll, expected the report to show soyabean harvest at 3.869 billion bushels and an average yield of 46.4 bushels per acre. In August, USDA forecast soyabean production at 3.916 billion bushels, based on an average yield of 46.9 bushels per acre.
Corn production was seen at 13.585 billion bushels, down from the government's August forecast of 13.686 billion bushels. USDA lowered its yield projection to 167.5 bushels per acre from 168.8 bushels per acre. Analysts expected the report to show corn production at 13.599 billion bushels and an average yield of 167.6 bushels per acre. USDA left its outlook for harvested acres unchanged at 81.101 million for corn and 83.549 million for soyabeans.
Soybean ending stocks for the 2015/16 crop year were lowered by 20 million bushels to 450 million bushels, reflecting increased demand from crushers. The 2014/15 soya end stocks view was lowered to 210 million bushels from 240 million bushels. Analysts had been expecting soya ending stocks of 223 million bushels for 2014/15 and 415 million bushels for 2015/16.
For corn, US ending stocks for 2015/16 were lowered to 1.592 billion bushels from 1.713 billion bushels, reflecting the cut to the production outlook. Corn ending stocks for 2014/15 were lowered by 40 million bushels to 1.732 billion bushels. Both were lower than market forecasts.
Lowering of sugar stocks The US Agriculture Department on Friday lowered its estimate for beginning and ending sugar stocks in the 2015/16 marketing year after revising its 2014/15 estimates, and also reduced its US cane production forecast. The monthly supply/demand report showed the closely watched stocks-to-use ratio stood at 13.5, down from 14.6 last month and down from 14.2 in the previous marketing year.
Beginning sugar stocks for 2015/16 are now pegged at 1.73 million short tons, down from 1.82 million short tons last month and 1.81 million short tons in 2014/15, the report showed. Ending stocks were forecast at 1.6 million short tons, down from last month's estimate of 1.8 million short tons and 1.7 million short tons this year.
US cane production was seen at 3.7 million short tons, down from last month's estimate of 3.8 million short tons and 3.8 million short tons in 2014/15. Sugar beet output was seen at 5 million short tons, up slightly from last month's forecast of 4.98 million short tons and the 4.8 million short tons estimated to have been produced this year. In Mexico, beginning stocks were pegged at nearly 800,000 metric tonnes in 2015/16, down 36,799 tonnes from last month's estimate, while exports to the United States were forecast at 1.3 million short tons, down 7,278 short tons due to changes made in the Suspension Agreement in December 2014.
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