WASHINGTON, Nov 9 (Reuters) – U.S. corn production will be higher than expected as harvest yields came in higher than expected despite some concerns about the crop throughout the growing season, government data showed on Thursday.
The U.S. Department or Agriculture also surprised the market by leaving its soybean yield estimate unchanged. Traders had expected it to lower the yield outlook. It did slightly trim its soybean production figure but the trade generally expected a bigger cut.
Market reaction was muted. After the report, corn and soybean prices were down only a few cents per bushel.
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U.S. soybean futures fell to a 1-1/2 week low on Tuesday as China continued to shun purchases from the United States and as forecasts for improved rains in the coming days reinforced expectations for a sizeable Midwest harvest.
The USDA in its monthly supply and demand report said the bumper corn harvest will raise stockpiles grain even as exports and usage from the feed sector rise from its previous estimates for the 2017-18 marketing year.
USDA pegged the corn crop at 14.578 billion bu., based on an average yield of 175.4 bu per acre. That was up from its October production outlook of 14.280 billion bu., based on an average yield of 171.8 bu. per acre.
Analysts had expected corn production between 14.250 billion bu and 14.459 billion bu, based on estimates given in a Reuters survey. Analysts’ yield estimates ranged from 171.7 to 174.0 bu. per acre.
If realized, the corn yield projection would top the previous record of 174.6 bu. per acre reached in 2016.
In Iowa and Illinois, the two largest production states for corn, USDA boosted its average yield by six bu. per acre from its October estimate.
For soybeans, USDA pegged the crop at 4.425 billion bu., topping the average of analysts’ estimates but in line with the range of 4.375 billion to 4.467 billion bu.
USDA left its soybean yield projection at 49.5 bu. per acre, unchanged from October. Analysts, on average, had forecast 49.3 bu. per acre.
U.S ending stocks of corn were seen at 2.487 billion bu., 147 million bu. higher than the October view. USDA raised both exports and usage from the feed and residual sector by 75 million bu.
USDA pegged soybean ending stocks at 425 million bu., down five million form October due to the cut to the production forecast.
For wheat, USDA lowered its US ending stocks view by 25 million bu. to 935 million bu. It raised its export outlook by 25 million bu. to one billion due to recent sales of hard red winter wheat to Iraq.
USDA raised its world wheat production figure by a little less than a million tonnes to 751.98 due mostly to a one million tonne increase in Russia.
But it also raised its world consumption estimate and so the year end stocks forecast fell to 267.53 million tonnes from 268.13 million.
| USDA Nov est | Avg of analyst range | Range | USDA Oct est | |
| Corn prod | 14.578 | 14.333 | 14.25-14.46 | 14.28 |
| Corn yield | 175.4 | 172.4 | 171.7-174.0 | 171.8 |
| Harvested area | 83.119 | 83.103 | 83.00-83.20 | 83.119 |
| – | – | – | – | – |
| Soy prod | 4.425 | 4.408 | 4.38-4.47 | 4.431 |
| Soy yield | 49.5 | 49.3 | 48.9-49.9 | 49.5 |
| Harvested area | 89.471 | 89.486 | 89.40-89.50 | 89.471 |
