US corn stocks swell as world recovers from tighter supplies

CHICAGO, Jan 12 (Reuters) -

U.S. corn inventories last month swelled to their largest level since 2018, the U.S. Department of Agriculture said on Friday, as global supplies recover from multi-year lows.

World grain supplies are becoming more comfortable after tightening due to the war in Ukraine, a major corn and wheat producer, and unfavorable crop weather.

A record U.S. corn harvest last year and lackluster U.S. export sales have contributed to growing stockpiles, and pushed corn futures prices to three-year lows in a blow to farmers.

"Stocks are building in the U.S. and the world instead of shrinking," said Don Roose, president of brokerage U.S. Commodities in Iowa.

U.S. corn stocks of 12.169 billion bushels on Dec. 1 were up 12.5% from a year earlier, when stocks set a nine-year low for that date, USDA data show. They exceeded analysts' estimates for 12.05 billion bushels.

Globally, the amount of corn left at the end of the marketing year is projected to hit a six-year high in 2023/24, after setting a two-year low the previous year and six-year low in 2020/2021, according to the USDA.

"There's plenty of corn out there," said Len Steiner, principal of food consultancy Steiner Consulting Group.

For wheat, U.S. stocks increased to 1.410 billion bushels as of Dec. 1, the largest since 2020 and above analysts' expectations for 1.387 billion bushels. A year earlier, stocks were about 7% smaller and hit the lowest level for Dec. 1 since 2007, according to the USDA.

The USDA raised its estimate for global wheat ending stocks from December, though they remain at an eight-year low. The government also projected all U.S. winter wheat seedings for the 2024 harvest will fall 6% to 34.425 million acres.

Bigger-than-expected crop inventories added pressure on grain prices, which extended recent declines. Corn futures hit their lowest level since December 2020 at the Chicago Board of Trade and soybean futures set their lowest since November 2021 after the USDA raised yield numbers for the now harvested U.S. crop.

The USDA said U.S. soybean stocks on Dec. 1 were 3 billion bushels, down from 3.021 billion a year earlier and the lowest since 2020. Analysts had expected 2.975 billion bushels.

The USDA separately cut its soybean production estimate for Brazil by 2.5% to 157 million metric tons, below last year's record crop of 160 million tons. Hot, dry weather hurt farms in parts of Brazil, the world's top soybean exporter, and some analysts said USDA's forecast is still too high. (Reporting by Tom Polansek in Chicago. Additional reporting by Karl Plume; Editing by Kirsten Donovan and David Gregorio)