US grain stockpiles to bulge as sales decrease

US corn and wheat stockpiles will swell to their largest size in years as corn exports slow and Americans use less flour, the government said on Wednesday (Mar 10) in a report.

In its last update of crop output and use before releasing its crucial planting intentions report at the end of March, the USDA cut its forecast for corn exports by 100 million bushels, due to large crops worldwide.

A USDA survey found small losses from the storm-delayed corn harvest - only 20 million bushels when markets were thinking 60 million bushels or more would be shaved from the production number.

"This will take the wind out of the bullish sails as we head into planting," said analyst Rich Nelson at consulting firm Allendale, pointing to the survey results.

At the trend-setting Chicago Board of Trade, futures prices for corn for delivery in May CK0 fell 3-1/2 cents on Wednesday (Mar 10), closing at US$3.65-1/2 a bushel. May wheat WK0 ended at US$4.81-1/2 a bushel, down 8 cents, after hitting a five-month low of US$4.78.

The corn stockpile will be 1.799 billion bushels when this year's crop is ready for harvest, said USDA - a seven-week supply, and up 60 million bushels from the previous estimate. The carry-over has topped 1.8 billion bushels only four times in the past 20 years.

Some 1 billion bushels of wheat - a half-year supply - will be in US grain bins and warehouses when the new crop is mature, up 20 million bushels from USDA's previous estimate. It would be largest stockpile since the end of 1987-88.

Wheat exports are flagging, and high flour extraction rates reduce the amount of US wheat needed to make food, said USDA. "At the same time, declining per-capita consumption is reducing demand for wheat and flour," it said.

The forecast corn and wheat surpluses are larger than estimates by grain traders, who expected wheat stocks at 971 million bushels and corn at 1.72 billion bushels. USDA estimated a soy carryover of 190 million bushels, a three-week supply. Traders expected 194 million bushels.