U.S. corn and wheat ending stocks will be higher than previously expected at the end of the marketing year due to cuts to already weak demand for U.S. supplies on the export market, the government said on Tuesday.
The U.S. Agriculture Department in its monthly supply and demand report also raised its soybean ending stocks outlook due to a slowdown in the pace of crushing at domestic processors.
The new domestic supply view for all three commodities came in above the average of analysts' estimates, near the high end of market forecasts.
On the global front, wheat ending stocks were raised above the high end of trade expectations, largely due to a 4.0-million tonne cut to usage by China, reflecting that country's policy shift that favors other grains.
The market had been dialing in a bearish stocks view, with many analysts citing weak demand and huge supplies as corn and soybean futures fell for four straight days heading into the report. Wheat had fallen for three days in a row, with the front-month Chicago Board of Trade futures contract hitting its lowest in more than a month.
USDA pegged global wheat ending stocks for the 2015/16 crop year at 238.87 million tonnes, up from its January forecast of 232.04 million tonnes. Global corn ending stocks were seen at 208.81 million tonnes and soybean ending stocks at 80.42 million tonnes.
U.S. wheat ending stocks were raised to a six-year high of 966 million bushels, reflecting a 25 million cut to exports. USDA said increased competition from Canada was hindering U.S. sales. Canadian exports were raised to 22 million tonnes, up 1.5 million from the USDA's January view and above the forecast for U.S. exports.
U.S. corn ending stocks were pegged at 1.837 million bushels, with a 50 million bushel cut to exports mitigated by a 25 million bushel increase in usage by the ethanol sector.
U.S. 2015/16 soybean end stocks were raised by 10 million bushels to 450 million due to the reduced crush.
The USDA also surprisingly raised its forecast for Argentine soybean production to 58.50 million tonnes, up 1.5 million from January and above the high end of the range of analysts' estimates. It left its outlook for Brazil soybean production unchanged at 100 million tonnes compared to the average analyst forecast of 99.43 million.
The corn production outlook was raised for both Argentina and Brazil.
(Reporting by Mark Weinraub; Editing by Andrea Ricci)