US corn edged lower after the USDA announced larger-than-expected closing stocks of 1.726 billion bushels from US production this year and increased global supplies to 181.73 million tons, up 8% from 2013.
“The surprise is the larger increase in global corn supplies. Rising reserves is never bullish,” Dale Durchholz of Bloomington, Illinois-based AgriVisor LLC told Bloomberg by phone.
The decline in corn futures came despite the US Department of Agriculture reducing forecast for this year to 1.146 billion from 1.331 billion.
“USDA had some interesting numbers, some of them bullish, but the bearish overall reaction is in line with the seasonal trends we’ve been warning about,” said grain analyst Bryce Knorr of Farm Futures.
Knorr told Farm Futures that the old-crop corn carryout projection by the USDA was even more optimistic than Farm Futures had forecast, despite the firm’s estimates being the lowest in the industry.Farm Futures outlook for the crop was 1.246 billion.
Yet, he added, 1.146 billion bushels is a good margin. The USDA predicted 165.3 bushels per acre for 2014, which Knorr said didn’t surprise, up from 158.8 the previous year.
He said the forecast was a warning and if corn was planted more or less on time and enjoyed good weather, supplies could get bigger.
July delivery corn futures closed at $5.075 per bushel as of 1:15 pm after sliding 1.7% on the Chicago Board of Trade. That was the crop’s biggest loss since May 1.
Global inventories of wheat will add 0.5% to 187.42 million tons in the trading year that commences June 1, up from 186.53 million the current year, statistics from USDA showed. The agency said that global trade is set to drop 6.3% to 151.8 million.
World production of wheat is expected to tumble 2.4% to 697 million, while consumption is projected to fall 0.9% to 696.2 million.
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