The main US-traded grain futures contracts trimmed the day’s gains, after a slightly more bearish than expected world stocks outlook from the USDA.
The monthly World Agriculture Supply and Demand Estimates for April painted a picture of swollen global stocks.
Grain futures fell on the report, with the sharpest declines seen in corn.
Ending stocks heavier than thought
World corn ending stocks came in at 208.91m tonnes. This was 1.94m tonnes above the March figure, and 1.56m tonnes above the average analyst forecast.
US corn ending stocks were lifted by 26m bushels to 1.862bn bushel, where analysts were looking for an upgrade of 17m bushels.
The report bought an 1m tonne upward revision to Argentine corn production prospects, noting that “timely rain during February and March was beneficial following some dryness and heat during January”.
May corn futures fell 6 ѕ cents a bushel on the news, trading at $3.57 Ѕ a bushel in mid-day deals, still up 0.2% on the day.
Increased EU, Argentine wheat crops
World wheat ending stocks for 2015-16 were seen at 239.26m tonnes, an upward revision of 1.63m tonnes from the forecast made in April.
Analysts were expecting a slight trim to world wheat stocks, to 237.22m tonnes.
The increase was driven by 1.0m tonnes more of production, as increased EU and Argentine output outweighed cuts to the crop in Ethiopia and Pakistan.
And ideas of world consumption were lowered as well, due to falling demand for both feed and food use.
Lower US demand
US wheat ending stocks were seen at a record 976m bushels, 10m bushels higher than the March forecast, due to “reduced feed and residual use”.
Still, the figure was marginally below analyst expectations.
Wheat futures fell 3 Ѕ a cents a bushel on the news, trimming the day’s gains.
The were 2 cents a bushel below pre-wasde levels in mid-day deals, at $4.52 ѕ a bushel, up 1.2% on the day.
World soybean stocks were seen at 79.02m tonnes, 150,000 tonnes up from the March estimate.
This is 60,000 tonnes higher than analysts were expecting on average, although it came in well below the top end of the estimate range.
But prospects for US soybean ending stocks were trimmed by more than markets were expecting, to 445m bushels, compared to a May forecast of 460m bushels, due to an upgrade for export prospects thanks to stronger Chinese demand.
Ideas for domestic soybean processing were left unchanged, while the USDA boosted its soybean production forecast for Argentina by 1.0bn.
Soybean futures fell on the news. The May soybean contract was trading down 0.1% on the day at $9.27 a bushel, 6 ѕ cents a bushel down from pre-Wasde levels.
(Source – http://www.agrimoney.com/news/grains-pare-days-gains-after-bearish-wasde–9485.html)