Oil Report

UPDATE 1-U.S. wheat stocks biggest since '87; corn, soy above 2015-USDA

(Adds analyst quote, price reaction)

WASHINGTON, Sept 30 (Reuters) - U.S. wheat supplies ballooned to the biggest in nearly 30 years during the summer months, topping expectations, as a 12 percent jump in production and weak demand on the export market filled storage bins, the government said on Friday.

The U.S. Agriculture Department also reported corn and soybean stocks as of Sept. 1 at multi-year highs despite record usage of both commodities during the June, July and August time period.

In its quarterly stocks report, the USDA said that wheat stocks as of Sept. 1 stood at 2.527 billion bushels, the biggest since 1987. Analysts, on average, had been expecting wheat stocks of 2.402 billion bushels, according to the average of estimates given in a Reuters poll.

Corn stocks were 1.738 billion bushels, the biggest since 2006, and soybean stocks were at a five-year high of 197 million bushels. Analysts were expecting corn stocks of 1.754 billion bushels and soybean stocks of 201 million bushels.

A year ago, wheat stocks stood at 2.097 billion bushels, corn stocks stood at 1.731 billion bushels and soybean stocks stood at 191 million bushels.

Chicago Board of Trade soft red winter wheat futures sank to their lowest in nearly a month immediately after the report was released. Prices quickly recovered but remained in negative territory.

Corn futures, which were trading in negative territory before the report, turned higher and soybean futures dipped briefly before returning to pre-report levels.

“Everything came in almost spot-on expectations,” said Joe Lardy, analyst at CHS Inc. “For once we didn’t get a massive curve ball. “Now we can focus on the critical issues, of what are the yields and what does harvest look like for corn and soybeans.”

The drawdown in soybean stocks for the three months ended Sept. 1 totaled 675 million bushels. Corn disappearance was 2.975 billion bushels.

Despite the massive drawdown in corn and soybeans, stocks were expected to be replenished quickly in the coming weeks due to forecasts for record harvests of both crops.

The USDA said that all-wheat production for the country would be 2.310 billion bushels, down from its August estimate of 2.321 billion bushels.

Winter wheat production was pegged at 1.672 billion bushels, up from the August estimate of 1.657 billion bushels. It also raised its outlook for durum and hard red winter wheat production but cut its estimate of soft red winter wheat and other spring wheat production.

Additional reporting by Michael Hirtzer in Chicago; Editing by Andrea Ricci and Tom Brown