By Tony C. Dreibus and Jeff Wilson
Jan. 12 (Bloomberg)
Wheat, corn and soybeans plunged the most allowed by the Chicago Board of Trade after the U.S. Department of Agriculture projected bigger supplies than forecast in December.
World wheat inventories may rise to 148.4 million metric tons by the end of the marketing year on May 31, up 0.7 percent from a December estimate, the USDA said today in a report. Global corn supplies will jump to 136 million tons, up 9.9 percent from a December forecast, the USDA said. U.S. soybean stockpiles before the next harvest may increase 9.7 percent.
“The stocks numbers were up so we’ve got more inventory to work our way through, and we didn’t need that,” said Larry Glenn, an analyst at Prime Ag in Quinter, Kansas.
Rising corn and soybean inventories may decrease feed costs for meat producers including Tyson Foods Inc. and Smithfield Foods Inc. and lower global demand for fertilizer from Mosaic Co. and seeds from Monsanto Co. Increased wheat supplies may cut costs for Kellogg Co. and General Mill Inc., the biggest U.S. cereal makers.
The U.S. wheat surplus as of May 31 will be 655 million bushels, the USDA said, up 5.1 percent from 623 million estimated in December and more than double the 306 million bushels on hand a year earlier.
U.S. soybean stockpiles will reach 6.1 million tons in the marketing year that ends on Aug. 31, up from 5.6 million projected a month ago, the USDA said.
U.S. corn inventories on Aug. 31 will total 1.79 billion bushels, up 21 percent from 1.474 billion forecast in December and up from 1.624 billion a year earlier, the USDA said. The department also raised its estimate for the 2008 U.S. corn crop, the world’s largest, by 0.7 percent and cut its estimates of U.S. exports, and production of ethanol and animal feed.
The estimate of last year’s soybean crop was also raised to 2.959 billion bushels. That’s up 1.3 percent from 2.921 billion projected in December and up from 2.677 billion bushels harvested a year earlier.
Corn and soybeans also fell after the USDA said U.S. farmers reduced the number of acres they planted with winter wheat by 9 percent, more than expected. Seedings were reduced after heavy rains in October and November left some fields too muddy for seeding, the government said.
“Reduced winter-wheat plantings mean farmers have more acres they can plant to corn and soybeans,” said Dale Schultz, a commodity specialist for Gottsch Enterprises, a cattle and hog feeder in Hastings, Nebraska. “There is absolutely no incentive to buy grain ahead.”