February 10, 2012

 

USDA forecasts record global wheat stocks in 2012

 

 

Despite a drought in South America, the USDA expected world wheat stocks to reach record volumes alongside large corn stocks this year.

 

India will post a record rice crop due to a strong monsoon this year as the global grain outlook improves slightly after years of tight stocks and rising prices.

 

USDA increased world wheat ending stocks by 1.5% to a record 213.1 million tonnes from its January estimate.

 

"The focus is on production in South America," said Don Roose, president of US Commodities. "The big, feared shocker is not there. The drought is basically over. The bean numbers could grow."

 

Corn and soy futures prices were up fractionally at mid-morning at the Chicago Board of Trade. Corn rose 1.1 % while soy were up 1% while wheat prices fell slightly.

 

For the second month in a row, USDA lowered its forecast of the soy harvest in Brazil and Argentina, and cut Argentine corn for the second time since January. But the cuts were largely in line with traders had been expected as drought continues to ravage agriculture output.

 

Argentina's corn crop was forecast at 22 million tonnes, down four million tonnes from the January estimate. Soy was forecast at 48 million tonnes, down 2.5 million tonnes in a month.

 

"High temperatures and extensive dryness resulted in irreversible damage to early corn," said USDA. Traders had expected a lower corn figure and a slightly higher soy estimate for Argentina.

 

In Brazil, the world's largest soy exporter, the crop will total 72 million tonnes, down two million tonnes from January's estimate said USDA.

 

Drought losses will curtail corn and soy exports from South America, bolstering US sales, said USDA.

 

US corn exports were forecast for 1.7 billion bushels this marketing year, up 3% from a month ago. US end stocks would fall to 801 million bushels, a three week supply, when the new crop is ready for harvest.

 

USDA will release its first projections of the new crops on Monday (Feb 13) as part of a 10-year "baseline" that is based on conditions in late 2011.