U.S. corn supplies will tighten more than expected in the coming months due to rising exports, but a bumper harvest will quickly re-stock grain bins, the government said on Tuesday.
A big soybean harvest also will help offset rising overseas demand for U.S. supplies of the oilseed, according to the U.S. Agriculture Department's monthly supply and demand report.
The government's surprise cut to its old-crop corn supplies estimate stemmed from harvest shortfalls in Brazil. USDA raised its estimate of old-crop U.S. corn exports by 75 million bushels and new-crop exports by 100 million due to crop problems in Brazil.
USDA pegged 2015/16 U.S. corn stocks at 1.701 billion bushels, down 7 million bushels from its June estimate. Analysts' forecasts had ranged from 1.708 billion bushels to 1.907 billion bushels, according to a Reuters poll.
USDA put new-crop corn stocks at 2.081 billion bushels, below the 2.205 billion bushels expected by the average of analysts' estimates but in line with a range of expectations. U.S. corn production for 2016/17 was forecast at 14.540 billion bushels, 15 million bushels above the average of analysts' estimates.
Soybean production was seen at 3.880 billion bushels. Analysts, on average, had expected a U.S. soybean crop of 3.867 billion bushels.
Old-crop U.S. soybean stocks were seen at 350 million bushels, in line with expectations. New-crop soybean stocks were raised by 30 million bushels to 290 million, also near the average of analysts' forecasts.
USDA left its outlook for average corn and soybean yields unchanged, at 168.0 bushels per acre and 46.7 bushels per acre, respectively. If realized, those yields would be the third biggest on record for each crop.
The government cut its estimate of 2015/16 Brazil corn production to 70.00 million tonnes from 77.50 million tonnes. It raised its corn harvest view for Argentina by 1 million tonnes to 28.00 million tonnes.
It also trimmed its Brazil soybean harvest estimate to 96.50 million tonnes from 97.00 million tonnes. It left its Argentine soybean harvest estimate unchanged at 56.50 million tonnes.
For wheat, the USDA raised its 2016/17 U.S. production view to a bigger-than-expected 2.261 billion bushels from 2.077 billion, due to a robust winter wheat crop.
The government pegged winter wheat yields at a record 53.9 bushels per acre, up 3.4 bushels from its June estimate. The high yields will result in an all winter wheat crop of 1.628 billion bushels, above the high end of market forecasts that ranged from 1.505 billion bushels to 1.625 billion bushels.