WASHINGTON (DTN) — USDA estimated 2014-15 soybean ending stocks at 415 million bushels and corn ending stocks at 1.801 billion bushels in its World Agricultural Supply and Demand Estimates report released on Friday. Both estimates are within the range of pre-report expectations.
Corn production estimates dropped 75 million bushels from USDA's June estimate to 13.860 bb to reflect lower harvested acreage. The national average yield was left unchanged at 165.3 bushels per acre.
USDA boosted soybean production to 3.8 billion, up 165 mb from June, due to increased harvest area indicated by the Acreage report. The national average yield stayed the same at 45.2 bpa.
Crop Production: http://www.nass.usda.gov/…
World Agricultural Supply and Demand Estimates (WASDE): http://www.usda.gov/…
CORN
USDA made numerous changes to the 2013-14 balance sheet to reflect the June 30 Grain Stocks report. It cut feed and residual use by 125 mb and increased ethanol production by 25 mb. The result was a 100 mb increase in ending stocks to 1.246 bb with a stocks-to-use ratio of 9.2{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48}.
The old-crop ending stocks change increased the 2014-15 beginning stocks figure by 100 mb. USDA trimmed production by 75 mb, resulting in a 25 mb increase in supplies. Feed and residual use took a 50 mb haircut, which USDA said was due to lower production and a higher rate of sorghum feeding.
Overall, USDA's 2014-15 ending stocks estimate came to 1.801 bb with a stocks-to-use ratio that climbed to 13.5{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48} from 12.9{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48} in June.
Globally, USDA raised its 2013-14 ending stocks to 173.42 million metric tons, higher than the range of pre-report expectations. USDA also increased 2014-15 ending stocks to 188 mmt, about 3 mmt above the range of pre-report expectations.
USDA increased China's corn production for both years, with a 0.8 mmt increase in 2013-14 and a 2 mmt increase for 2014-15. Increased acreage for Brazil's second-crop corn led to a 2 mmt increase in 2013-14 production.
The global stocks-to-use figure increased to 19.5{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48} from 18.9{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48}
SOYBEANS
USDA increased its estimates of 2013-14 crush by 25 mb and exports by 20 mb. It also adjusted the feed and residual category from 0 to -69 mb. The result was an ending stocks estimate of 140 mb.
The higher beginning stocks and increased production boosted 2014-15 total supply by 180 mb. USDA anticipated a higher crush rate and increased exports, boosting those categories by 40 mb and 50 mb respectively.
Ending stocks increased 90 mb from June's estimate to 415 mb with a stocks-to-use ratio of 11.7{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48}, an increase from June's 9.4{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48}.
USDA pegged global 2013-14 ending stocks at 67.24 mmt, a slight change from June that was within the range of expectations. New-crop ending stocks, at 85.3 mmt, came in toward the high end of pre-report estimates. The global stocks-to-use ratio came in at 30.1{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48}.
WHEAT
USDA pegged the wheat crop at 1.99 bb, within the range of pre-report expectations but 50 mb higher than its June Crop Production report. Expectations for the winter wheat crop declined, largely on a decrease to hard red winter wheat production.
USDA estimated all winter wheat production at 1.37 bb. Hard red winter made up 703 mb, down 2{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48} from June, while soft red winter increased 1{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48} from June to 458 mb.
USDA pegged the hard red spring wheat crop at 520 mb, up 6{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48} from last year. Durum production was estimated at 60 mb, down 4{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48} from 2013.
On supply and demand side, USDA increased production and overall supplies, but cut all of the demand categories. Feed and residual use was trimmed by 15 mb and exports by 25 mb. The result was an 86 mb increase in ending stocks to 660 mb with a stocks-to-use ratio 31.7{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48}.
Global ending stocks for 2014-15 came in toward the high end of pre-report estimates at 189.54 mmt, about a 1 mmt increase from June, with a stocks-to-use ratio of 27.1{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48}.
ANALYSIS
On the domestic side, USDA's estimate of U.S. corn production for 2014-15 totaled 13.860 billion bushels, resulting in ending stocks of 1.801 billion bushels, more than expected with a 50 mb reduction in feed demand. U.S. corn ending stocks for 2013-14 were increased from 1.146 to 1.246 bb, also more than expected. “Friday's report should be viewed as bearish for both old-crop and new-crop corn,” said DTN Analyst Todd Hultman.
U.S. soybean production was estimated at 3.800 billion bushels for 2014-15, resulting in an increase in the domestic ending stocks estimate from 325 million to 415 million bushels, more than expected. U.S. soybean ending stocks for 2013-14 were increased from 125 to 140 mb with residual demand reduced from +18 to -69 mb, offsetting modest increases in export and crush demand. “Friday's report should be viewed as bearish for both old-crop and new-crop soybeans,” Hultman said.
USDA's estimate of U.S. wheat production was increased to 1.992 billion bushels for 2014-15, resulting in ending stocks of 660 million bushels, more than expected with reductions made for feed and export demand. The U.S. hard red winter wheat crop was estimated at 703 mb, down from 720 mb a month ago. “Friday's U.S. report should be viewed as bearish for wheat,” Hultman said.
On the world side, USDA's 2013-14 estimate of global ending stocks of corn increased from 182.65 to 188.05 mmt, more than expected. World ending soybean stocks for 2014-15 increased from 82.88 to 85.31 mmt, also more than expected. World ending wheat stocks for 2014-15 increased from 188.61 to 189.54 mmt, more than expected. “Friday's world estimates from USDA are bearish for corn, soybeans and wheat,” Hultman said.
