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By Mark Weinraub
WASHINGTON, June 9 (Reuters) - U.S. wheat supplies will be bigger than expected despite a snowstorm in early May that analysts had worried severely damaged the crop in Kansas, the top- producing state, the U.S. Department of Agriculture said on Friday.
USDA boosted its forecast for U.S. winter wheat production to 1.250 billion bushels from 1.246 billion, and raised its yield projection in Kansas by 2 bushels per acre (bpa) to 44.0 bpa.
The government also said in its monthly supply and demand report that soybean stocks will swell more than expected due to weakening soymeal usage that forced processing plants to slow their crushing pace.
Soybean futures dropped about 10 cents immediately after the report’s release while wheat dropped 4 cents. Both commodities quickly recovered most of their losses.
“We go back to watching the weather,” said Roy Huckabay of Chicago brokerage Linn & Associates. “We’ll watch the weekend rains and see how they perform.”
USDA left its outlook for corn stocks and production unchanged despite concerns about adverse weather hindering crop development.
Domestic wheat ending stocks for the 2017-18 marketing year that began on June 1 were pegged at 924 million bushels. The 2017-18 winter wheat production forecast was raised to 1.250 billion bushels.
Analysts had predicted the report would show winter wheat production sliding to 1.239 billion bushels, with 2017-18 U.S. wheat stocks at 911 million bushels, according to the average of estimates in a Reuters poll.
USDA raised its 2017-18 world wheat stocks projection to 261.19 million tonnes, above the high end of a range of analysts’ estimates, largely due to a bump of 2 million tonnes in its forecast for Russian production.
For soybeans, USDA pegged U.S. 2016-17 ending stocks at 450 million bushels, up 15 million bushels from its May outlook and bigger than the average of analysts’ estimates.
It trimmed its outlook for the 2016-17 soy crush by 15 million bushels to 1.910 billion bushels. Soymeal usage was lowered to 33.150 million tons from 33.500 million tons.
The government also raised its 2017-18 soybean ending stocks forecast to account for the bigger carry-in from 2016-17.
Global 2016-17 soybean ending stocks were raised to 93.21 million tonnes, above analysts’ expectations. USDA raised its estimate of Brazil’s soybean crop to 114 million tonnes.
U.S. corn ending stocks for both 2016-17 and 2017-18 were left unchanged. Analysts had been expecting cuts to both years corn ending stocks view.
Additional reporting by Karl Plume in Chicago; editing by Paul Simao, G Crosse