Falling exports, ethanol production boosts U.S. corn stocks: USDA

Source: By Mark Weinraub and Karl Plume, Reuters • Posted: Monday, March 11, 2019

CHICAGO (Reuters) – The U.S. Department of Agriculture (USDA) issued a surprise boost to its outlook for domestic corn supplies on Friday by trimming its estimate of how much will be used by exporters and ethanol producers.

The government also lowered its outlook for domestic soybean supplies, bumping up its estimate of the crush, and raised its wheat stocks view as export prospects worsened.

Domestic corn ending stocks for 2018-19 were forecast at 1.835 billion bushels, the USDA said in its monthly supply and demand report, up from its outlook for 1.735 billion bushels in February.

Analysts in a Reuters poll had given corn ending stocks estimates that ranged from 1.680 billion bushels to 1.795 billion bushels.

The government cut its corn export view by 75 million bushels to 2.375 billion. The latest outlook also calls for ethanol producers to use 5.550 billion bushels of corn, 25 million less than the prior estimate.

“It was certainly warranted that they cut the corn export forecast and the ethanol forecast, but 100 million bushels is a fairly sizable cut for one month,” said Brian Hoops, president of Midwest Market Solutions. “It was pretty unlikely that exports would meet that earlier forecast because of big South American corn production this year after the drought last year.”

Chicago Board of Trade corn futures sank to their lowest since Nov. 27. Wheat futures dropped to a fresh 13-month low but quickly rebounded into positive territory, while soybeans hit their lowest since Feb. 20.

Soybean end stocks for the 2018-19 marketing year will be 900 million bushels, down from the government’s February estimate of 910 million bushels but still the biggest on record. The crush forecast was raised to 2.100 billion bushels from 2.090 billion bushels.

The soybean export projection was left unchanged at 1.875 billion bushels despite U.S. Agriculture Secretary Sonny Perdue’s announcement in late February that China had committed to buying an additional 10 million tonnes of U.S. soybeans.

U.S. wheat ending stocks were pegged at 1.055 billion bushels, up from the February outlook of 1.010 billion and above the high end of market expectations. Wheat exports were cut to 965 million bushels from 1.000 billion.

USDA left its outlook for the Argentine corn and soybean crops unchanged and also maintained its Brazil corn crop view. It cut its Brazil soy harvest outlook to 116.50 million tonnes from 117.00 million.

Additional reporting by Karl Plume; Editing by Susan Thomas