WASHINGTON, Nov. 9 (Reuters) – The U.S. Department of Agriculture raised its already record forecast for U.S. corn and soybean harvests on Wednesday, with gains keyed by increased yield estimates in major production states such as Iowa, Minnesota and Ohio.
The market expected a soybean increase, but thought corn would be smaller.
The bumper harvest will leave a larger-than-expected stockpile of both commodities even with increased usage forecasts, the government said in its monthly supply and demand and production reports.
Timely planting and near-perfect growing conditions for much of the summer weighed on corn and soybean prices throughout the growing season and into harvest as reports from the fields confirmed expectations of a massive crop.
USDA pegged U.S. corn production for the 2016-17 marketing year at 15.226 billion bushels, based on an average yield of 175.3 bu. per acre, up from its October outlook of a 15.057 billion bushel harvest and an average yield of 173.4 bu. per acre.
Analysts had been expecting corn production of 15.041 billion bu. and a yield of 173.2 bu. per acre, based on the average of forecasts in a Reuters survey. The USDA’s yield and production view matched the high end of the range of analysts’ forecasts.
For soybeans, USDA said the crop would be 4.361 billion bu., 92 million higher than its October outlook. The government’s soy yield view was raised to 52.5 bu. per acre from 51.4.
Analysts, on average, had expected a soybean harvest of 4.314 billion bu., based on a yield of 52.0 bu. per acre.
In Iowa, the top corn production state and the second biggest for soybeans, USDA raised the average soybean yield to 59.0 bu. per acre from 58.0. The Iowa corn yield view also was raised by 1 bushel per acre to 199.0
USDA unexpectedly raised its 2016/17 corn ending stocks outlook to 2.403 billion bu., which would be the fifth biggest ever, from 2.320 billion.
USDA raised its soybean ending stocks forecast to 480 million bu., 60 million bu. higher than the average of analysts’ estimates and up from its October estimate of 395 million bu.. If realized, soybean ending stocks would be the third biggest on record.
On the demand front, USDA raised its soy usage outlook by just 7 million bu., with a 20 million bushel cut to crushings largely mitigating 25 million bu. of increased exports.
The government also boosted its wheat ending stocks outlook by 5 million bu. to 1.143 billion, in line with market forecasts.