USDA on Thursday tightened its estimates for U.S. wheat, corn and soybean stocks more than analysts expected, bolstering futures prices.

“There are a lot of surprises in this report,” said Arlan Suderman, chief commodities economist for the StoneX Group, about USDA’s quarterly Grain Stocks report that showed soybean stocks down 4% and wheat and corn stocks down 7%.

The first surprise was the size of the cut USDA made to corn stocks. The new estimate for corn stored on- and off-farm, as of Dec. 1, is 10.8 billion bushels.

"We saw corn stocks come in tighter than expected by about 70 million bushels,” Suderman said. “Then USDA cut harvested acreage by 1.6 million for this past year.”

Farmers harvested just 79.2 million acres of corn last year, down from an earlier estimate of 80.8 million, USDA said in its latest World Agricultural Supply and Demand Estimates report, also released Thursday.

“Corn production is estimated at 13.73 billion bushels, down 200 million, as an increase in yield is more than offset by a 1.6-million-acre cut to harvested area,” USDA said in the January WASDE report.

And with less corn, more wheat is likely to go into feed, said Suderman. That also contributed to stronger futures prices for wheat on Thursday.

USDA also released its annual Winter Wheat and Canola Seedings report Thursday which showed that farmers planted far more wheat than analysts expected, said a spokesman for the U.S. Wheat Associates. While that may appear to be bullish, Suderman said, traders believe much of it won’t be harvestable.

Farmers planted 36.95 million acres of winter wheat for the 2023 crop, 11% more than the 33.271 million acres planted last year.

“There can be a big difference in what is planted and what is actually harvested, and I think the trade understands that,” he said. “And then you add to that the fact that wheat stocks … came in tighter than what was anticipated.”

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The quarterly Grain Stocks report shows that, as of Dec. 1, there are 1.28 billion bushels of wheat in storage, a 7% decrease from the same time a year ago.

U.S. soybean supplies are also tight. USDA trimmed its harvested acreage and production estimates for the 2022 crop in the WASDE report and reported tighter supplies in the Grain Stocks report.

“They dropped harvested acreage by 300,000 and that resulted in the quarterly stocks coming in tighter than anticipated by about 90 million bushels,” Suderman said.

USDA is now estimating U.S. soybean production for the 2022-23 marketing year at 4.276 billion bushels, down from a previous prediction of 4.346 million, according to WASDE. And the Grain Stocks report shows 3.02 billion bushels in storage as of Dec. 1.

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