Global soybean inventories will be larger than the government forecast a month ago as crops improve in South America, analysts said. U.S. corn and wheat stockpiles may drop as countries boost imports amid political turmoil.
Rain the past month boosted soybean yields in Brazil and Argentina, the world’s biggest exporters after the U.S. The U.S. Department of Agriculture later Thursday probably will raise its inventory estimate by 1.9 percent, according to a Bloomberg News survey. The agency may lower its outlook for U.S. corn reserves by 1.4 percent, and by 1 percent for domestic wheat supplies.
The “USDA will raise its South American crop forecasts,” increasing the world reserves, said Anne Frick, the senior oilseed analyst for Prudential Bache Commodities LLC in New York. Still, “growth in production may not be keeping up with growth in consumption” in emerging economies including China and India, she said.
Before Wednesday, soybean prices surged 46 percent in the past year as demand boomed in China, the biggest importer. Corn has jumped 88 percent, and wheat is up 58 percent. Rising global food prices contributed to political unrest that toppled regimes in Egypt and Tunisia this year and sparked protest throughout the Middle East. Saudi Arabia may increase grain imports in a bid to achieve “food security,” the USDA said last week.
World soybean inventories may total 59.32 million metric tons, before the Northern Hemisphere harvests begin, from 58.21 million estimated in February, according to the average estimate of 13 analysts surveyed. Last year, inventories were 60.17 million, the highest since 2007.
Brazil will harvest a record 70.1 million tons this season, the Agriculture Ministry said last month. The USDA forecast a crop of 68.5 million tons on Feb. 9.
Soybean futures for May delivery fell 13 cents, or 0.9 percent, to close at $13.82 a bushel yesterday on the Chicago Board of Trade. The most-active contract climbed to a 30-month peak of $14.5575 on Feb. 9.
U.S. supplies of unsold soybeans may total 139.4 million bushels as of Aug. 31, a Bloomberg survey showed. That’s down from 140 million forecast by the government in February and from 151 million bushels on hand before last year’s harvest.
The USDA will trim its outlook for domestic corn reserves on Aug. 31 to 666 million bushels, according to the survey. That would be the lowest since 1996 and down 61 percent from a year earlier.
Record production of ethanol and increased overseas demand for corn in livestock feed and food production may prompt the USDA to raise its forecast for global consumption, reducing inventories before the harvests.
From Sept. 1 to Feb. 24, shipments for delivery before Aug. 31 rose 6.2 percent to 33.969 million tons, USDA data show.
The government may cut its forecast of world corn inventories before the Northern Hemisphere harvests to 121.81 million tons, from 122.51 million estimated in February and 145.16 million a year earlier, the survey showed. That would be the lowest since 2007 as demand rose amid falling global output.
“The USDA will be conservative adjusting the demand numbers” with a quarterly inventory report scheduled for release on March 31, said Alexander Bos, an analyst at Macquarie Bank Ltd. in London. “The market will begin to brace itself for a stocks report which will likely show marginal, or no demand rationing had occurred” from December to February, he said.
Corn futures for March delivery fell 12 cents, or 1.7 percent, to $7.055 Tuesday, capping the first three-day drop since November. Before Wednesday, prices were up 12 percent in 2011.
People in developing countries are becoming richer and eating more meat and dairy, meaning more grain is used for livestock feed and land for grazing animals, Thomas Helbling, an adviser for the IMF’s research department, and economist Shaun Roache said last week.
Rising demand for biofuels and bad weather also tightened supply, they wrote in an article published in the agency’s Finance & Development magazine.
U.S. wheat reserves on May 31 probably will total 810 million bushels, compared with 818 million forecast in February and 976 million a year earlier, the survey showed.
World wheat inventories may decline to 177.56 million tons, the survey showed, down from 177.77 million estimated by the government in February and 197.6 million a year earlier.
“The increase in export demand can reduce supplies, and the good thing is we can spare a few more bushels without getting supplies tight,” said Jerry Gidel, a market analyst for North American Risk Management Services Inc. in Chicago.
Wheat futures for May delivery fell 21 cents, or 2.6 percent, to $7.7975 a bushel yesterday on the CBOT. Prices reached a 29-month high of $9.1675 on Feb. 14.
The U.S. is the world’s biggest producer of corn and soybeans, and the largest exporter of those commodities in addition to wheat.
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