By Mark Weinraub
CHICAGO, Could 12 (Reuters) – Sturdy home demand will preserve U.S. stockpiles of corn and soybeans close to seven-year lows even after farmers harvest the crops they’re presently seeding, the federal government mentioned on Wednesday.
The shares estimates had been consistent with market expectations however the report confirmed that the current good points in ag commodities, highlighted by soybean futures’ Sv1 rally to an almost nine-year excessive this week, are more likely to proceed.
“You possibly can make the argument that the market has been undervalued for the final a number of months,” mentioned Joe Vaclavik, president of Commonplace Grain.
The U.S. Agriculture Division’s month-to-month World Agricultural Provide and Demand Estimates report additionally confirmed that rising demand from the feed sector will push wheat stockpiles to a seven-year low by June 2022 as livestock and poultry producers scramble to seek out cheaper proteins for his or her animals’ diets.
Exports had been seen falling for corn, soy and wheat versus the prior crop yr.
USDA projected that U.S. corn shares would stand at 1.507 billion bushels by Sept. 1, 2022, up from 1.257 billion bushels anticipated on Sept. 1, 2021.
Soybean shares in September 2022 had been seen rising simply 20 million bushels from 120 million bushels forecast for 2021, based on USDA’s month-to-month World Agricultural Provide and Demand Estimates report.
The report projected a 4.5% will increase in corn utilization by ethanol producers in 2021/22 as extra of the corn-based gas is required for drivers returning to the roads because the COVID-19 pandemic eases. For soybeans, demand from crushers that course of soybeans into soymeal for animal feed, was seen up 35 million bushels to 2.225 billion.
Wwarmth shares had been seen falling to 774 million bushels by June 2022, down 11.2% from a yr earlier and the bottom since 752 million bushels in 2015. Demand for wheat from the feed sector was seen rising 70% to 170 million bushels.
(Further reporting by Tom Polansek; Modifying by Caroline Stauffer)
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