The U.S. 2017 corn and soybean harvests will be bigger than expected despite a slow start to planting and concerns that hot and dry conditions stressed the corn crop during critical periods of development, the government said on Thursday.
The U.S. Department of Agriculture’s forecasts for both corn and soybean yield and production topped the high end of market forecasts, with the soybean outlook estimated at record highs.
The world markets are already awash with grains and beans after corn and soybean stocks hit record highs last season following bumper harvests. Prices have languished and U.S. farm income has fallen four years in a row.
Prices for both corn and beans fell sharply after the USDA issued its monthly crop production and supply and demand reports, with soybean futures plunging 2.1 percent to their lowest since June 20 after earlier trading at the highest since Aug. 1. Corn was down 2.5 percent.
“Yields coming in above expectations are the feature for both corn and beans,” Dan Cekander of DC Analysis said, “That’s putting us under pressure. We’re going to go back to watching the weather, but this will give the market more cushion on supply.”
USDA pegged corn production at 14.153 billion bushels, based on an average yield of 169.5 bushels per acre (bpa). Those figures, if realized, would both be the third biggest ever. In July, USDA forecast a corn harvest of 14.255 billion bushels and a yield of 170.7 bpa.
For soybeans, USDA said the crop would be 4.381 billion bushels, eclipsing the 2016 harvest’s total of 4.307 billion bushels. Soybean yields were seen at 49.4 bpa, up from the USDA’s July projection of 48.0 bpa.
The government raised its 2017-18 soybean ending stocks view to 475 million bushels to reflect the record crop projections, slightly above the high end of analysts’ forecasts. It cut its 2016-17 soybean ending stocks view to 370 million bushels, largely due to a bump of 50 million bushels to the export outlook.
Corn ending stocks for 2017-18 were trimmed to 2.273 billion bushels, near the high end of market forecasts.
USDA left its harvested acres projections unchanged, at 88.731 million for soybeans and 83.496 million for corn.
The government’s all-wheat harvest outlook of 1.739 billion bushels was below its July outlook.
For spring wheat other than durum, USDA pegged production at 402 million bushels, down 21 million bushels from July, but above the average of market forecasts. A severe drought across the northern U.S. Plains has raised concerns about spring wheat harvest throughout the growing season.