WASHINGTON (DTN) — USDA pegged 2014-15 corn ending stocks at 1.726 billion bushels and soybean ending stocks at 330 million bushels in its initial supply and demand estimate for the new crop year. Both estimates are within the range of pre-report expectations.
USDA also revised old-crop, 2013-14 ending stocks for both crops. USDA reduced corn ending stocks to 1.146 bb by increasing ethanol and export forecasts. On soybeans, USDA lowered ending stocks to 130 mb on increased exports, crushings and imports.
CORN
USDA forecasts 2014-15 production at 13.935 billion bushels with an average yield of 165.3 bushels per acre. USDA's initial 2014-15 forecasts for production, use and ending stocks forecasts are likely to change. Plenty of production risk remains for the corn and soybean crops.
For 2013-14, USDA increased ethanol demand by 50 million bushels, but the overall food, seed and industrial category increased by 35 mb, implying that food or seed use took a 15 mb haircut. USDA's export forecasts increased to 1.9 bb from 1.75 bb, resulting in a stocks-to-use ratio of 8.4{0a3336b3da8cf935de4f3eb78fe29508c4b8b5ebd27d01af2d815614325d533e}. That's down from last month's 9.9{0a3336b3da8cf935de4f3eb78fe29508c4b8b5ebd27d01af2d815614325d533e} stocks-to-use ratio.
USDA upwardly revised 2013-14 world ending stocks by a little more than 10 million metric tons on larger carry-in, production and lower usage. USDA projects that 2014-15 global ending stocks will be 181.73 million metric tons, above the range of pre-report expectations.
SOYBEANS
USDA lowered 2013-14 U.S. ending stocks to 130 mb by increasing imports by 25 mb, crush by 10 mb and exports by 20 mb. The stocks-to-use ratio came in at 3.8{0a3336b3da8cf935de4f3eb78fe29508c4b8b5ebd27d01af2d815614325d533e}, down from 4{0a3336b3da8cf935de4f3eb78fe29508c4b8b5ebd27d01af2d815614325d533e} last month.
New crop production estimates came in at a record 3.635 billion bushels. That's up 346 mb from last year's production using a trend yield of 45.2 bpa. USDA foresees increased crush and exports in 2014-15. The initial stocks-to-use ratio came in at 9.6{0a3336b3da8cf935de4f3eb78fe29508c4b8b5ebd27d01af2d815614325d533e}. The average price declined to $10.75.
Globally, USDA pegged 2013-14 soybean ending stocks at 67 mmt, below the range of pre-report expectations. Global ending stocks for 2014-15 came in at 82.2 mmt, toward the low end of pre-report expectations.
WHEAT
USDA issued its Crop Production report for wheat on Friday, with hard red winter wheat production increasing slightly while soft red wheat production declined 21{0a3336b3da8cf935de4f3eb78fe29508c4b8b5ebd27d01af2d815614325d533e}. USDA forecasts the average winter wheat yield at 43.1 bushels per acres. HRW harvested acreage is expected to be 10{0a3336b3da8cf935de4f3eb78fe29508c4b8b5ebd27d01af2d815614325d533e} higher than last year while SRW acreage is expected to be down 19{0a3336b3da8cf935de4f3eb78fe29508c4b8b5ebd27d01af2d815614325d533e}.
Despite drastic declines in Kansas, Oklahoma and Texas production due to drought, freeze and winterkill, USDA sees sizeable overall winter wheat production increases in North Dakota, South Dakota, Montana and Nebraska. Those gains come largely on increased acreage and higher yield estimates.
All-wheat production for 2014-15 came in at 1.96 billion bushels, with an ending stocks estimate of 540 mb, a decline from 2013-14's 583 mb ending stocks figure.
ANALYSIS
USDA's estimate of U.S. corn production for 2014-15 totaled 13.935 billion bushels, more than expected and resulting in ending stocks of 1.726 billion bushels. U.S. corn ending stocks for 2013-14 were reduced from 1.331 to 1.146 bb, less than expected and primarily due to a 150 mb increase in exports. Friday's report should be viewed as bullish for old-crop corn and bearish for new-crop corn, said DTN Analyst Todd Hultman.
U.S. soybean production was estimated at 3.635 billion bushels for 2014-15, more than expected, resulting in an ending stocks estimate of 330 million bushels. U.S. soybean ending stocks for 2013-14 were reduced from 135 to 130 mb, less than expected with a 25 million bushel increase offset by a total 30 million bushel increase in crush and exports.
Friday's report should be viewed as bullish for old-crop soybeans and bearish for new-crop, Hultman said.
USDA's estimate of U.S. wheat production was set at 1.963 billion bushels for 2014-15, down 8{0a3336b3da8cf935de4f3eb78fe29508c4b8b5ebd27d01af2d815614325d533e} from the previous year with ending stocks of 540 million bushels, as expected, Hultman said. The U.S. hard red winter wheat crop was estimated at 746 mb, up from 744 a year ago. For 2013-14, the estimates remained unchanged with an ending stocks estimate of 583 mb. Friday's report should be viewed as neutral to bullish for wheat, Hultman said.
On the global side, Friday's world estimates from USDA are bearish for corn, neutral to bearish for soybeans and neutral for wheat, Hultman said.
USDA's 2013-14 estimate of global ending stocks of corn increased from 158 to 168.4 mmt, largely due to an upward revision from previous years and a 3 mmt production increase for Brazil.
World ending soybean stocks for 2013-14 stayed unchanged at 66.98 mmt and, for 2014-15 were set at 82.23 mmt with increased production expected from the U.S. and Brazil.
World ending wheat stocks for 2013-14 stayed close to April's estimate at 186.53 mmt. For 2014-15, world ending wheat stocks are expected to increase slightly to 187.42 mmt, but with production lower at 697 mmt.
Source: DTN
Posted by Northern Ag Network
