USDA boosts already-large corn, soybean harvest expectations

WASHINGTON, Sept 12 (Reuters) – The U.S. Department of Agriculture unexpectedly raised its U.S. corn and soybean harvest forecasts on Tuesday, adding further bearish pressure to a market already struggling with massive global supplies.

The harvest outlooks, issued in the government’s closely watched Crop Production report, topped market forecasts for the second straight month.

Corn futures following the report fell about 2.5 percent and soybeans are down about 1.5 percent.

The impact to the soybean balance sheet was mitigated by strong U.S. exports, but corn supplies will rise as demand from ethanol and food, seed and industrial sectors was seen falling.

The USDA kept is U.S. wheat production figure steady but raises the forecast for Russian wheat by about 3.5 million tonnes. That was partly offset by a one million tonne reduction in Australian wheat production and a smaller cut to European production. Overall, world wheat production rose 1.67 million tonnes to 744.85 million tonnes, but its ending stocks forecast dipped about 500,000 tonnes to 263.14 million tones because of adjustments in domestic use and exports.

US PRODUCTION

U.S. corn production in the 2017-18 crop year will total 14.185 billion bushels, based on an average yield of 169.9 bu. per acre, USDA said in the report. That compares to the government’s month-ago corn forecasts of 14.153 billion bu. for production and 169.5 bu. per acre for yield.

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Farmers also will harvest a record 4.431 billion bu. of soybeans, USDA said, based on an average yield of 49.9 bu. per acre. In August, USDA pegged the soybean harvest at 4.381 billion bu., based on a yield of 49.4 bu. per acre.

Both the soybean production and yield outlooks topped the high end of the range of estimates in a Reuters survey of analysts. The average market forecast for soybean yield was 48.8 bu. per acre. For soy production, the average was 4.328 billion bu..

Analysts, on average, had expected corn production of 14.035 billion bu. and a yield of 168.2 bu. per acre.

USDA noted that its September crop outlook does not account for flooding in parts of southeastern Texas and southwestern Louisiana caused by Hurricane Harvey. Additionally, due to Hurricane Irma, USDA will collect harvested acreage data for impacted states ahead of its October Crop Production report.

U.S. corn ending stocks for the 2017-18 crop year were pegged at 2.335 billion bu., up from 2.273 billion bu. in the USDA’s August World Agriculture Supply and Demand Estimates report. On the demand side, USDA cut corn usage by ethanol producers by 25 million bu. and food, seed and industrial usage by 75 million bu..

Domestic soybean ending stocks for 2017-18 were left unchanged at 475 million bu.. USDA raised its export outlook for soybeans by 25 million bu. in 2017-18 and by 20 million bu. in 2016-17.

CORN 2015/16 2016/17 Est. 2017/18 Proj. 2017/18 Proj.
Aug Sep
Million Acres
Area Planted 88 94 90.9 90.9
Area Harvested 80.8 86.7 83.5 83.5
Bushels
Yield per Harvested Acre 168.4 174.6 169.5 169.9
Million Bushels
Beginning Stocks 1731 1737 2370 2350
Production 13602 15148 14153 14184
Imports 68 55 50 50
   Supply, Total 15401 16940 16573 16585
Feed and Residual 5114 5425 5450 5475
Food, Seed & Industrial 2/ 6648 6870 7000 6925
   Ethanol & by-products 3/ 5224 5435 5500 5475
   Domestic, Total 11763 12295 12450 12400
Exports 1901 2295 1850 1850
   Use, Total 13664 14590 14300 14250
Ending Stocks 1737 2350 2273 2335
Avg. Farm Price ($/bu) 4/ 3.61 3.35 2.90 – 3.70 2.80 – 3.60
SOYBEANS 2015/16 2016/17 Est. 2017/18 Proj. 2017/18 Proj.
Aug Sep
Million Acres
Area Planted 82.7 83.4 89.5 89.5
Area Harvested 81.7 82.7 88.7 88.7
Filler Bushels
Yield per Harvested Acre 48 52.1 49.4 49.9
Million Bushels
Beginning Stocks 191 197 370 345
Production 3926 4307 4381 4431
Imports 24 25 25 25
   Supply, Total 4140 4528 4777 4801
Crushings 1886 1895 1940 1940
Exports 1942 2170 2225 2250
Seed 97 104 101 101
Residual 18 14 35 35
   Use, Total 3944 4183 4301 4326
Ending Stocks 197 345 475 475
Avg. Farm Price ($/bu) 2/ 8.95 9.5 8.45 – 10.15 8.35 – 10.05

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