(Wall Street Journal) – U.S. corn futures trimmed losses Tuesday after federal forecasters projected tighter-than-expected stockpiles of the grain.
Soybean futures traded lower, while wheat prices were mixed.
Corn prices shed declines—and briefly moved higher—after the U.S. Agriculture Department estimated that corn stockpiles before the next harvest would total 1.777 billion bushels. That was down from its estimate in February of 1.827 billion bushels and below analyst forecasts for 1.822 billion bushels, reflecting in part expectations for healthier demand for the grain from livestock producers and overseas grain buyers.
The USDA, in a monthly supply-and-demand report, also cut its forecast for global corn stockpiles, surprising some analysts.
Corn futures for March delivery were down 1 1/4 cents, or 0.3%, to $3.82 a bushel at the Chicago Board of Trade. The March contract had fallen more than 1% before the USDA report was released.
May corn futures, the most actively traded contract, fell 1/2 cent, or 0.1%, to $3.88 1/4 a bushel.
Corn prices tumbled in the past two years as U.S. growers produced back-to-back bumper crops. But demand for corn from buyers including livestock producers has been relatively healthy, limiting recent declines in the futures market.
“We’ve chewed through hundreds of millions of bushels over the past five months, which has kept corn prices from turning into a disaster for” corn growers, said Brian Hoops, president of brokerage Midwest Market Solutions in Springfield, Mo.
Tighter projected grain inventories may encourage farmers to plant more corn this spring than has been anticipated, said Marty Foreman, an economist at agricultural-analysis firm Doane Advisory Services in St. Louis. Grain analysts have speculated that the high cost of growing corn relative to soybeans would prompt U.S. growers to shift acres in favor of the oilseeds.
Globally, the USDA said corn stockpiles will total 185.3 million metric tons in the 2014-15 season, down from 189.6 million projected in February, owing in part to lower expected production in South Africa.
Soybean futures declined after the USDA left unchanged its forecasts for U.S. stockpiles on Aug. 31 to total 385 million bushels. Analysts had expected the government to trim estimates to 379 million bushels, according to a Wall Street Journal survey.
Global soybean stockpiles will total 89.5 million metric tons, up slightly from 89.3 million projected in February.
The report yielded few surprises for soybean traders, said Daniel Hueber, general manager of futures brokerage The Hueber Report in Sycamore, Ill. Though U.S. soybean exports have been stronger than last season overall on heavier demand from China and other countries, the sales pace has recently started to slow.
CBOT March soybean futures dropped 3 3/4 cents, or 0.4%, to $9.84 1/2 a bushel. Most-active May soybean futures shed 6 cents, or 0.6%, to $9.87 1/4 a bushel.
Wheat prices got a boost after the USDA report showed lower-than-expected U.S. and global stockpiles. But futures were mixed, as strength in the U.S. dollar weighed on prices for lightly traded near-term contracts. A strong greenback can cut overseas demand for U.S. wheat because it raises the price for foreign buyers.
The government projected U.S. wheat inventories as of May 31, the end of the season for that commodity, at 691 million bushels, lower than the 692 million estimated in February. World-wide, wheat supplies this year will reach 197.7 million metric tons, modestly lower than February’s estimate of 197.9 million tons, the USDA said.
CBOT March wheat futures slipped 2 cents, or 0.4%, to $4.92 1/4 a bushel. Most actively traded May contracts gained 3 1/4 cents, or 0.7%, to $4.93 1/4 a bushel.
