Wall Street Journal writer Jesse Newman reported on Friday that, “Global stockpiles of corn, soybeans and wheat will reach record highs next year, the U.S. Department of Agriculture said Friday, extending an unprecedented glut of agricultural commodities.
“The USDA in a monthly crop report increased its forecasts for production in countries like Australia and Brazil, with bigger harvests pushing stockpiles to fresh peaks next year. The USDA stood by its bet that U.S. crop inventories will stay high.”
The Journal item pointed out that, “Global soybean inventories for the 2016-17 season were pegged at 82.9 million metric tons, which would be the highest ever. The world will also have the most wheat on hand thanks in part to near-perfect weather in Australia, which increased harvests there. The USDA said world wheat reserves will likely hit 252.1 million metric tons.”
Ms. Newman explained that, “Soybean futures for January delivery rose 10 1/2 cents, or 1%, to $10.37 1/2 a bushel at the Chicago Board of Trade.
“Corn futures closed higher as the USDA also left unchanged its projection for U.S. inventories next August at 2.403 billion bushels. Analysts had expected the government to boost its projection to 2.416 billion bushels.”
Despite record global stocks, Friday’s report also stated that, “The projected range for the season-average corn price received by producers is raised 5 cents on both ends to $3.05 to $3.65 per bushel, on continued higher-than-expected early-season prices…[and]…The U.S. season-average soybean price for 2016/17 is forecast at $8.70 to $10.20 per bushel, up 25 cents on both ends of the range.”
