Market News & Headlines >> Larger Grain Stocks, Smaller Soy Stocks Expected in 2016/17

When USDA releases its monthly supply/demand report on Tuesday morning grain and soybean traders will be focusing heavily on the Department’s first monthly forecasts for the upcoming 2016/17 marketing year, which should reinforce expectations for supplies to stay very comfortable. 

However, USDA’s old-crop soybean balance sheet will hold plenty of interest for traders due to the high level of uncertainty over Argentina’s 2015/16 production and speculation about how much crop problems there may boost demand for U.S. exports. Traders will also be watching the latest estimate for Brazil’s 2015/16 corn production. 

Trade estimates of the 2015/16 U.S. soybean carryout average 426 million bushels in a range from 395-445 million bushels compared with USDA’s April forecast of 445 million bushels. USDA is likely to boost U.S exports based on the current pace of sales and shipments as well as Argentina’s problems. Pre-report estimates of the 2016/17 U.S. soybean carryout average 405 million bushels in a range from 290-500 million bushels. 

Trade expectations for the 2015/16 U.S. corn carryout average 1.841 billion bushels in a range from 1.762-1.891 billion bushels, down from USDA’s April forecast of 1.862 billion bushels. There is some potential for USDA to raise U.S. old-crop exports due to recent strong sales and shipments and damage to Brazil’s second-crop corn production. However, supplies are expected to grow further next marketing year. On average, the trade sees U.S. corn ending stocks rising to 2.294 billion bushels in 2016/17, with carryout estimates ranging from 1.950 billion all the way up to 2.555 billion bushels. 

Already large U.S. wheat stocks are expected to grow even larger. Trade estimates of the 2015/16 U.S. wheat carryout average 981 million bushels in a range from 961 million to 1.011 billion, compared with USDA’s April forecast of 976 million bushels.  Expectations for the 2016/17 carryout average 997 million bushels in a range from 820 million to 1.140 billion bushels, with stronger U.S. winter wheat yields expected to offset a drop in U.S. wheat seedings.