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.
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.
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.|
|Yield per Harvested Acre||168.4||174.6||169.5||169.9|
|Feed and Residual||5114||5425||5450||5475|
|Food, Seed & Industrial 2/||6648||6870||7000||6925|
|Ethanol & by-products 3/||5224||5435||5500||5475|
|Avg. Farm Price ($/bu) 4/||3.61||3.35||2.90 – 3.70||2.80 – 3.60|
|SOYBEANS||2015/16||2016/17 Est.||2017/18 Proj.||2017/18 Proj.|
|Yield per Harvested Acre||48||52.1||49.4||49.9|
|Avg. Farm Price ($/bu) 2/||8.95||9.5||8.45 – 10.15||8.35 – 10.05|