US corn and soybean supplies were expected to rise sharply in the coming year due to forecasts for a record harvest for both crops, the government said on Friday, raising the potential for further price declines for both commodities.
But wheat supplies were seen falling to their lowest in 16 years, as a severe drought in the US Plains wrecked the robust harvest potential from increased acreage.
Prices of corn, wheat and soy have fallen over the past year on more abundant global supplies even as war continues in major producer Ukraine.
A historically poor wheat crop from the US leaves the world more vulnerable to shortages if problems arise elsewhere, however.
US Agriculture Department
Ending stocks of corn for the 2023/24 marketing year were pegged at 2.222 billion bushels, up from 1.417 billion in 2022/23, the US Agriculture Department said in its monthly World Agriculture Supply and Demand Estimates report.
Soybean end stocks were forecast to grow to 335 million bushels from 215 million with wheat stocks seen falling to 556 million bushels, their lowest since 2008.
Wheat futures jumped after the report was released, with the K.C. July hard red winter wheat futures contract KWN3 that tracks the drought-stricken crop in the US Plains gaining 4.8% and hitting its highest since 1 April.
The harvest outlooks for corn and soybeans kept pressure on the futures contracts that track the crops farmers across the Midwest are currently planting.
"USDA took a big ax to the cash price for corn and beans, and took the ending stocks to burdensome levels on corn and almost burdensome levels on beans," said Don Roose, president of agricultural broker US Commodities.
Corn production will reach 15.265 billion bushels, based on an average yield of 181.5 bushels per acre and soybean production will hit 4.510 billion bushels, with average yields pegged at 52.0 bushels per acre.
If realized, the corn harvest will top the previous record of 15.148 billion bushels, set in 2016.
The current biggest U.S. soybean crop of 4.465 billion bushels was harvested in 2021.
Analysts had been expecting the report to show 2023/24 ending stocks at 2.094 billion for corn and 293 million for soybeans, according to the average of estimates in a Reuters poll. For 2022/23, the average of analysts estimates was 1.366 billion for corn and 212 million for soybeans.