USDA Edges Up Outlook on Global Grain Supplies

Forecasters at the U.S. government eased concerns about grain supplies low, increasing slightly the estimates of global supplies of corn, wheat and soybeans, while leaving domestic supplies projected mostly unchanged.
The U.S. Department of Agriculture in its monthly crop forecast still shortages of basic foods, however, seen as the stabilization of the inventory of South American countries began their crops.
While the report does not erase the fears of a global food shortage this year, futures markets, which have risen more than two year highs on supply concerns, fell Thursday, with corn and wheat each plus 2% on the Chicago Board of Trade.
"The global figures are a little negative in all areas," said Don Roose, president of the U.S. Commodities, a brokerage firm in Des Moines, Iowa
However, many traders are facing government reports due out later this month in the spring crop planting estimates and provision of quarterly data. Morgan Stanley analysts called Thursday's report harvesting of a "nonevent" in a note to clients, and little change in the overall outlook for grain and soybeans.
In the monthly crop report, the government of an increase in global wheat stocks at the end of the season by 2.3% to 181.9 million metric tons. The report said better than expected crops in Argentina and Australia, where the solid culture in the western parts of the country offset the flood losses in the east. U.S. supplies at the end of the season of wheat is forecast up 3% a month ago to 843 million bushels.
Wheat was the grain market first rally in 2010, thanks to Russia's harsh drought. However, the USDA said Thursday that Russia "seems to be the fulfillment of its wheat requirements" after the implementation of an export ban, and supplies Australia wide harm U.S. exports wheat. Forecasters also took note of the smaller markets around the world are reducing their purchases due to high prices.
Meanwhile, the USDA increased slightly its estimate for global supplies of soybeans and corn. stronger performance than expected requests forecasters to increase corn production in Brazil to 53 million tonnes, 2 million, and a draft register for the Brazilian soybean production. The agency made lower estimates for corn production in Mexico after freeze damage to crops there.
With the shortage of global supplies of corn and soybeans, buyers are turning to Brazil and Argentina, where farmers are harvesting or soon will be. U.S. production inventory and forecast for soybeans and corn for the current crop year remained unchanged. Analysts had been projecting a slight cut supplies of corn, but the government left its estimate of demand, including ethanol production and exports of corn, unchanged.
However, U.S. projection of corn and supply remains the lowest in 15 years, and analysts say prices should remain high to ensure that farmers plant corn enough this year to begin rebuilding supplies. maize supplies have been drawn up by strong demand from the ethanol industry and also in Mexico, which has increased exports due to the freezing of the cultures.
As for the so-called soft commodities, futures frozen orange juice concentrate sold in the USDA report, as forecasters raised their outlook for the harvest of Florida. The USDA also reduced cotton production is expected in India and China, the reduction of total world production of 0.3% to 114 950 000 bales, compared with forecasts last month. The report said cotton farmers U.S. receive 20 cents more per pound of cotton is planted early harvest compared to last year, and nearly double what was paid in 2008/09.

(Source: http://online.wsj.com/article/SB10001424052748704823004576192501798382540.html)