CHICAGO, May 12 (Reuters) - Strong domestic demand will keep
U.S. stockpiles of corn and soybeans near seven-year lows even
after farmers harvest the crops they are currently seeding, the
government said on Wednesday.
The stocks estimates were in line with market expectations
but the report showed that the recent gains in ag commodities,
highlighted by soybean futures' rally to a nearly
nine-year high this week, are likely to continue.
"You could make the argument that the market has been
undervalued for the last several months," said Joe Vaclavik,
president of Standard Grain.
The U.S. Agriculture Department's monthly World Agricultural
Supply and Demand Estimates report also showed 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 find cheaper proteins for their animals' diets.
Exports were seen falling for corn, soy and wheat versus the
prior crop year.
USDA projected that U.S. corn stocks would stand at 1.507
billion bushels by Sept. 1, 2022, up from 1.257 billion bushels
expected on Sept. 1, 2021.
Soybean stocks in September 2022 were seen rising just 20
million bushels from 120 million bushels forecast for 2021,
according to USDA's monthly World Agricultural Supply and Demand
The report projected a 4.5% increases in corn usage by
ethanol producers in 2021/22 as more of the corn-based fuel is
needed for drivers returning to the roads as the COVID-19
pandemic eases. For soybeans, demand from crushers that process
soybeans into soymeal for animal feed, was seen up 35 million
bushels to 2.225 billion.
Wheat stocks were seen falling to 774 million bushels by
June 2022, down 11.2% from a year earlier and the lowest since
752 million bushels in 2015. Demand for wheat from the feed
sector was seen rising 70% to 170 million bushels.
(Additional reporting by Tom Polansek; Editing by Caroline