U.S. wheat supplies were seen shrinking below market estimates as the export outlook brightened despite ample global stocks and a firm dollar that had been seen as a brake on overseas demand, the U.S. Agriculture Department said on Thursday.
Domestic corn stocks also were seen falling below the government's previous outlook as ethanol makers ramped up production, USDA said in its monthly supply and demand report.
U.S. wheat ending stocks for the 2016/17 marketing year were pegged at 1.139 billion bushels, down from the January estimate of 1.186 billion bushels and below market forecasts that ranged from 1.145 billion to 1.211 billion bushels.
Domestic corn ending stocks were lowered to 2.320 billion bushels from 2.355 billion.
The USDA left its outlook for 2016/17 domestic soybean ending stocks unchanged at 420 million bushels. It also held its forecast for U.S. soy exports steady at 2.050 billion bushels despite a fast pace of shipments through January.
"Competition from expected record South American exports will limit U.S. shipments to well below last year's record level this summer," USDA said in the report.
The government left its estimate of soybean production in Brazil unchanged at 104.00 million tons, close to market forecasts. It cut its forecast for the Argentine soybean harvest to 55.50 million tons, down from 57.00 million tons a month earlier.
Analysts, on average, had expected the report to show Argentine soybean production at 54.54 million tons and Brazilian soybean production at 104.08 million tons, according to a Reuters survey.
On the global front, USDA's estimate of world wheat ending stocks was cut to 248.61 million tons from 253.29 million tons. USDA cited a cut to harvest expectations in India and Kazakhstan as the reason for the drop.
World corn ending stocks were lowered to 217.56 million tons from 220.98 million tons, with usage by China, the top consumer of the yellow grain, raised to 231.00 million tons from 227.00 million tons.
World soybean ending stocks were lowered to 80.38 million tons from 82.32 million tons, mostly due to the reduced forecast for the Argentine harvest.