by Katie Micik, DTN Markets Editor
WASHINGTON (DTN) — USDA trimmed domestic corn ending stocks to just below 2 billion bushels and soybean stocks to 410 million bushels in the World Agricultural Supply and Demand estimates report released Wednesday morning.
Corn stocks, at 1.998 bb, fell within the range of pre-report expectations. The soybean stocks estimate came in toward the low end of expectations.
USDA increased world wheat ending stocks while traders had expected a cut. USDA boosted Canadian and Kazakhstan production, leading to a 2 million metric ton increase in global ending stocks to 194.9 mmt.
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CORN
USDA left the corn balance sheet mostly unchanged except for the food, seed and industrial use category. Corn use for sweeteners is expected to increase 10 mb in the 2014/15 marketing year, leading to a corresponding 10 mb decline in ending stocks. The stocks-to-use ratio dropped slightly to 14.6{28d451f77a4de8a52cd2586be6cc1800527fe70ea84e8b3f90098495d088e086}.
Global corn ending stocks increased to 192.2 mmt, up 0.7 mmt from last month. USDA cut Argentina corn production by 1 mmt, reflecting lower plantings. However, USDA said it anticipates higher yields in Argentina due to abundant early season soil moisture.
Overall, the global stocks-to-use increased slightly to 19.8{28d451f77a4de8a52cd2586be6cc1800527fe70ea84e8b3f90098495d088e086}.
SOYBEANS
USDA increased its expectation for soybean exports by 40 mb, reflecting the record export pace and prospects for additional sales and shipments ahead of South America's harvest. The increased sales dropped ending stocks to 410 mb with a stocks-to-use ratio of 11.2{28d451f77a4de8a52cd2586be6cc1800527fe70ea84e8b3f90098495d088e086}, a 1.2 percentage point decline.
Globally, ending stocks declined slightly from last month to 89.9 mmt, even with pre-report expectations. USDA left its forecasts for Brazil and Argentina production unchanged at 94 mmt and 55 mmt, respectively. The stocks-to-use ratio declined slightly to 31.4{28d451f77a4de8a52cd2586be6cc1800527fe70ea84e8b3f90098495d088e086}.
WHEAT
USDA put domestic ending stocks at 654 mb, up 10 mb from last month's report due to a corresponding increase of durum wheat imports from Canada. USDA sees hard red winter wheat exports declining 15 mb, but that will be offset by 5 mb increases in exports of spring wheat, white wheat and durum wheat. The ending stocks-to-use ratio increased slightly to 30.5{28d451f77a4de8a52cd2586be6cc1800527fe70ea84e8b3f90098495d088e086}.
Globally, ending stocks increased as USDA incorporated Canadian government data that showed a 1.8 mmt increase in production to 29.3 mmt. USDA also saw a slight increase in wheat production among the 12 former Soviet Union countries. Global ending stocks-to-use came in at 27.4{28d451f77a4de8a52cd2586be6cc1800527fe70ea84e8b3f90098495d088e086}.
ANALYSIS
On the domestic side of the WASDE report, USDA reduced its estimate of U.S. corn ending stocks for 2014-15 from 2.008 billion to 1.998 billion bushels, less than expected, said DTN Analyst Todd Hultman. USDA's change came from a 10 million bushel increase in food, seed, and industrial demand. “Wednesday's report should be viewed as slightly bullish for corn,” Hultman said.
USDA's estimate of U.S. soybean ending stocks for 2014-15 was reduced from 450 million to 410 million bushels, less than expected due to a 40 million bushel increase in the export estimate. “Wednesday's report should be viewed as slightly bullish for soybeans,” Hultman said.
USDA's estimate of U.S. ending wheat stocks for 2014-15 was increased from 644 million to 654 million bushels, a little more than expected due to a 10 million bushel increase in the imports estimate. “Wednesday's U.S. report should be viewed as slightly bearish for wheat,” Hultman said.
Meanwhile, on the global side, USDA's estimate of global ending corn stocks for 2014-15 was increased from 191.50 mmt to 192.2 mmt, slightly more than expected due to a 1.5 mmt production increase for China.
The world ending soybean stocks estimate for 2014-15 was reduced from 90.28 to 89.87 mmt, as expected with little change noted from November's estimates.
The estimate of world ending wheat stocks for 2014-15 was increased from 192.90 to 194.90 mmt, more than expected with small production increases for Canada and Kazakhstan.
“Wednesday's world estimates from USDA are slightly bearish for corn and wheat, neutral for soybeans,” Hultman said.
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