The Agriculture Department lowered U.S. corn production numbers but increased its estimates on supplies.
USDA lowered its estimate on domestic corn production to 12.43 billion bushels. Despite the reduction, that would still be the fourth-largest harvest on record. The government raised U.S. corn beginning stocks by 23 percent to 1.13 billion bushels and pushed ending stocks up nearly 30 percent to 866 million bushels.
While the supply is deemed adequate to meet current demand, some analysts noted potential for the tightest stocks-to-use ratios in recent years. Nevertheless, the upwardly revised stocks report was viewed by most as bearish.
Soybean numbers were decreased as government officials cut the average yield to 41.5 bushels per acre. That would put 25 million fewer bushels in the bin and result in total U.S. production of just over 3 billion bushels. Officials anticipate higher- than-expected demand will pull beginning stocks 4 percent lower to 215 million bushels. Soybean ending stocks also were revised downward to 160 million bushels. Noting historically tight stock-to-use ratios, private analysts say there is little room for world supply shortfall and viewed the news as bullish.
And USDA prognosticators pushed ending stocks for wheat up 10 percent to 837 million bushels. Analysts credited lower-than-expected domestic use and exports for the increase. Harvest numbers were reduced by 3 percent to just over 2 billion bushels. But, the trade reacted bearishly as adequate supplies are expected to meet demand without difficulty.