WASHINGTON, Oct 12 (Reuters) – The U.S. Department of Agriculture on Thursday lowered its outlook for the soybean yield from its September forecast but left the total production view for the oilseed largely unchanged due to increased harvested acres.
However, it lowered its forecast of year end soybean stocks.
It bumped up its domestic corn production outlook as record yields in areas outside the major producing states boosted the size of the overall harvest.
Soybeans rallied about 2.5 percent following the report and corn also edged higher, pulled up by soybeans. The wheat numbers in the report were bearish, with bigger crops forecast in the European Union, former Soviet Union and Canada. The rally in soybeans supported canola futures.
The soybean numbers were a bullish surprise.
“The trade thought that big crops get bigger and we were going to take the bean yield up,” said Don Roose, analyst at U.S. Commodities. “Now our ending stocks are getting smaller, not bigger.”
In its monthly crop production report, USDA pegged the corn harvest at 14.28 billion bushels, based on an average yield of 171.8 bu. per acre. That compares with its September forecasts of 14.184 billion bu. and an average yield of 169.9 bu. per acre.
USDA said it expected record yields in Alabama, Georgia, Idaho, Kentucky, Louisiana, Michigan, Mississippi, Pennsylvania, South Carolina and Tennessee, all of which are outside the main crop belt. It also raised its yield outlook in key producing states such as Illinois, Iowa and Indiana.
The soybean harvest was seen at a record 4.431 billion bu. with yields trimmed by 0.4 bu. per acre to 49.5 bu. per acre. Harvested acres were raised to 89.471 million from 88.731 million.
Analysts had been expecting a corn harvest of 14.204 billion bu. on a yield of 170.1 bu. per acre and a soybean harvest of 4.447 billion bu. on a yield of 50 bu. per acre, based on the average of estimates given in a Reuters survey.
USDA also raised its outlook for U.S. corn ending stocks to 2.34 billion bu., up five million from September. That compares with market expectations for ending stocks of 2.289 billion bu..
Wheat ending stocks also were raised, to 960 million bu., with the USDA citing increased usage of corn, which is expected to cut into demand for wheat in the feed and residual sector. Analysts, on average, had expected wheat ending stocks of 946 million bu..
Soybean ending stocks for 2017-18 were lowered to 430 million bu. from 475 million. USDA increased the usage in the residual category for the 2016-17 crop year, which cut into the supplies at the start of the 2017-18 crop year.
On the global front, USDA raised its 2017-18 wheat stocks outlook to 268.13 million tonnes, above the range of analysts’ forecasts. It lowered its corn ending stocks view to 200.96 million tonnes and cut its soybean ending stocks view to 96.05 million tonnes. Both the world corn and soy ending stocks projections were in line with the range of market forecasts.