Surging export demand for US corn will cut into domestic stockpiles of the grain by more than expected, the US Agriculture Department said on Thursday. But US soyabean stocks were forecast to rise as a bumper harvest in Brazil will allow overseas buyers to source their oilseed purchases from the South American nation.
"What they're saying is US corn is cheap now and we're looking at less competition coming out of South America," said Jim Gerlach, president of A/C Trading. Chicago Board of Trade corn futures remained steady to firm after the report was released. Soyabean futures dipped into negative territory.
USDA's monthly supply and demand report pegged US corn ending stocks for the 2017/18 marketing year at 2.352 billion bushels, down from its January estimate of 2.477 billion bushels. That fell below the low end of analysts' forecasts that ranged from 2.425 billion bushels to 2.550 billion bushels, according to a Reuters survey.
USDA boosted its US corn export forecast for the year by 125 million bushels to 2.050 billion bushels. Soyabean ending stocks were seen at 530 million bushels, USDA said, up from the government's January outlook for 470 million bushels. The government lowered its US soya export forecast to 2.100 billion bushels from 2.160 billion bushels.
Estimates given in a Reuters poll for soyabean ending stocks ranged from 460 million bushels to 535 million bushels. USDA also raised its US wheat ending stocks view to 1.009 billion bushels from 989 million bushels due to lower exports. Wheat exports were pegged at 950 million bushels compared to 975 million bushels in January. Food use for wheat was raised by 5 million bushels.
In South America, USDA bumped up its estimate of the Brazilian soyabean crop to 112 million tonnes from 110 million tonnes. It lowered its outlook for soyabean production in Argentina to 54 million bushels from 56 million tonnes. Soyabean exports were left unchanged for Argentina, at 8.50 million tonnes, despite the smaller harvest view. The Brazilian soyabean export outlook was raised by 2 million tonnes to 69 million tonnes.
Corn production in Brazil was seen at 95 million tonnes, unchanged from January. The Argentine corn harvest view was lowered to 39 million tonnes from 42 million tonnes. Argentine corn exports were lowered by 1.5 million tonnes to 27.5 million tonnes. Brazilian corn exports were raised by 1 million tonnes to 35 million tonnes.