WASHINGTON, Nov 8 (Reuters) – The U.S. corn crop will be a record-setter – 30 percent bigger than last year’s drought-shortened harvest – that results in the largest ending stocks since 2006, the government said on Friday.
In its first crop forecast in two months, the Agriculture Department estimated the crop at 13.989 billion bushels, marginally lower than traders expected. USDA’s estimate for corn ending stocks was well below market expectations, though, as bumper exports and animal feed use whittle down the record supply.
USDA in October canceled its monthly crop report, tthe first time it failed to issue a monthly forecast since 1866, after the 17-day government shutdown halted work on the collection of field data.
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The U.S. soybean crop would be the third-largest on record at 3.258 billion bushels, 1 percent larger than the analysts expected, USDA said. It estimated ending stocks of 170 million bushels, close to the 172 million expected by analysts.
In global terms, with a crop of 88.66 million tonnes, the United States is once again the world’s largest soybean grower, edging out Brazil’s 88.0 million – a record for that South American country.
U.S. wheat ending stocks were forecast for 565 million bushels, well above expectations of 516 million bushels. Higher flour extraction rates reduced demand for food wheat.
USDA raised its forecast of the corn crop by 1 percent from its previous report as higher yields offset smaller harvested area. Corn was forecast to yield an average 160.4 bushels an acre, nearly 2.5 bushels more than traders expected.
“Higher yields are forecast this month across the Plains, Corn Belt, and South,” it said.
“Total corn use is raised 275 million bushels, offsetting much of the supply increase,” said USDA. It boosted its estimate of exports by 175 million bushels and feed use by 100 million bushels.
For soybeans, USDA raised its crop estimate by 3 percent from its previous estimate and 7 percent above the 2012 crop. World oilseed production was also forecast at a record high for 2013/14.
The gargantuan crops have already pulled down futures prices. Chicago corn futures this week traded at the lowest point in more than three years, but USDA suggested that the sell-off could go further.
It forecast the lowest farm-gate price for corn in five years, an average of $4.50 per bushel. U.S. corn and soybean prices set record highs during last year’s drought.
Friday’s forecast was based on Nov. 1 conditions, a point when 59 percent of corn and 77 percent of soybeans were harvested. Corn and soybeans are the two most widely grown U.S. crops.
Abundant crops will help hold down food prices, which are forecast to rise by 2 percent this year and by 3 percent in 2014, close to the 20-year average of a gain of 2.8 percent annually.
USDA sharply increased its corn ending stocks forecast for China this month, reflecting an 8-million-tonne crop in projected “food, seed and industrial” usage.” That increase in stocks fed through to global corn carryout as well, which rose almost 13 million tonnes.
