“That big drop in global corn production coming from Brazil helps to justify some of those USA new crop demand numbers we’re seeing for corn”, Ted Seifried, chief market strategist at Zaner Group LLC in Chicago, said in a telephone interview.
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The government’s surprise cut to its old-crop corn supplies estimate stemmed from harvest shortfalls in Brazil.
That number is up 8 percent from their estimate just last month, and up 19 percent from last year’s crop. Analysts’ forecasts had ranged from 1.708 billion bushels to 1.907 billion bushels, according to a Reuters poll.
Analysts surveyed by Reuters expected the USDA to raise its forecast of 2015/16 and 2016/17 USA corn ending stocks, while lowering its forecast for 2015/16 US soybean stocks.
Chicago corn futures climbed to a 10-day high on Monday, while soybeans gained for a second session with prices underpinned by forecasts of hot and dry weather for the key U.S. Midwest producing region. Soybean production was seen at 3.880 billion bushels.
Old-crop USA soybean stocks were seen at 350 million bushels, in line with expectations.
Nebraska’s previous record average yield was 49 bushels an acre set in 2014. If realized, those yields would be the third biggest on record for each crop.
The government cut its estimate of 2015/16 Brazil corn production to 70.00 million metric tons from 77.50 million metric tons.
USDA also boosted the number of corn and soybeans expected to be harvested this fall because more were planted than initially estimated. It raised its corn harvest view for Argentina by 1 million tonnes to 28.00 million tonnes. It left its Argentine soybean harvest estimate unchanged at 56.50 million tonnes.
Forecasters say the state’s producers will bring in 60 million bushels this year based on conditions as of July 1, according to the U.S. Department of Agriculture’s National Agricultural Statistics Service.
However, he says many projections for new crop corn carryover were much higher than USDA’s actual as they were working in the larger acreage figure of 94.2 million acre from the June Acreage report.
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USA wheat has been recovering from a 10-year low hit last week amid strong harvest yields in the United States and the Black Sea region.
