U.S. grain stockpiles have climbed higher over the past month because of lower corn and wheat exports, according to analysts surveyed by The Wall Street Journal ahead of a closely watched crop report due Tuesday.
The U.S. Department of Agriculture will update its estimates for domestic and global crop supplies and demand, as abundant world inventories and a strong U.S. dollar stifle some U.S. exports.
Government forecasters are expected to peg domestic corn stockpiles at the end of the 2015-16 season on Aug. 31 at 1.849 billion bushels, up from the 1.837 billion forecast last month, according to the median forecast of analysts polled.
“I think USDA will trim corn and wheat exports,” said Craig Turner, senior broker at Daniels Trading in Chicago. “We have large supplies and we have a strong dollar and… [global buyers] can get the crops other places for a cheaper price.”
U.S. corn has recently grown more competitive on the global market thanks to slowing grain shipments from Brazil and rising prices for Argentine corn. However, analysts said the window for U.S. exports likely will narrow in coming months as farmers in South America harvest their latest crops, filling grain bins with fresh supplies.
The USDA is expected to estimate U.S. wheat stockpiles have climbed to 978 million bushels from its prior forecast of 966 million as of May 31, the end of the season for that commodity.
Soybean stockpiles are forecast to dip to about 456 million bushels from 460 million as of Aug. 31, according to analysts. They said the size of last year’s soybean crop may have been overstated, while demand for soybean meal may have been better than expected.
The USDA likely will project world corn stockpiles for the 2015-16 season at 208 million metric tons compared with its March estimate of 207 million, said analysts. World wheat reserves will likely total 237.2 million tons, slightly lower than the previous forecast. Global soybean inventories are expected to rise from last month to 79.4 million tons.
The USDA’s estimate for soybean production in Brazil may increase slightly to 100.2 million metric tons from last month’s 100 million tons, analysts said. Argentina’s soybean output is expected to rise to 59.3 million tons from the 58.5 million projected in March.
Farmers in Argentina will likely harvest 27.3 million tons of corn, up from the 27 million forecast last month, while Brazilian growers will probably collect 84 million tons of corn, unchanged from the USDA’s prior estimate, the analysts said.
The USDA is set to release its monthly crop report at noon EDT Tuesday.
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