Corn and soybean futures dropped this morning after USDA increased its crop estimates from last month.
Shortly after USDA issued its reports, December corn futures were down about 10 cents and November soybeans were off about 17 cents.
USDA pegged corn production at 14.184 billion bushels based on an average U.S. yield of 169.9 bu./acre. If USDA is right, this would be the third highest yield and production on record.
Estimated soybean production of a record-high 4.431 billion bushels is up 1 percent from the August estimate and up 3 percent from last year. The forecast is based on an average yield of 49.9 bu./acre, up 0.5 bu. from last month’s estimate but down 2.2 bu. from last year.
With the increase of 31 million bushels over last month’s estimated corn crop, USDA increased its projections for feed and residual use but reduced its projection for food, seed, ethanol and other industrial consumption of corn. The result is a projected 2017-18 carry-over of 2.335 billion bushels, up from 2.273 billion projected last month but a bit below the estimated 2.35 billion in 2016-17.
Analysts had expected USDA to reduce its average yield estimate to 168.2 bu. bu./acre, for a crop of 14.035 billion bushels, according to a Reuters survey. They also expected USDA to project 2017-18 carry-over at 2.17 billion bushels.
USDA projected world ending stocks for 2017-18 at 202.47 million metric tons, compared with average trade estimates from Reuters at 200.74 MMT.
USDA added 50 million bushels this month to its soybean crop estimate. It reduced 2017-18 carry-in 25 million bushels and increased its export projection 25 million bushels, so projected ending stocks stayed unchanged from the 475 million bushels projected in August. That’s up from 345 million in 2016-17 and 197 million in 2015-16.
Reuters’ survey found analysts had expected USDA to forecast average yield at 48.8 bushels and the crop at 4.328 billion bushels. Their crop estimate was very close to USDA’s number, but USDA estimated yield 1.1 bu. higher than analysts expected.
USDA estimated soybean harvested acres at 88.731 million, versus the Reuters average trade estimate of 88.752 million.
World ending stocks of soybeans in 2017-18 likely will reach 97.53 MMT, off 250,000 MT from last month’s estimate but still up 1.57 MMT from 2016-17, USDA said. Reuters found analysts expected, on average, 97.39 MMT carryover for 2017-18.
Acres in October
Hurricane Harvey made landfall near Rockport, Texas, Aug. 25 and the resulting rainfall flooded parts of southeastern Texas and southwestern Louisiana, USDA noted in its Crop Production report. Ahead of the October report, USDA will collect harvested acreage information on soybeans and several other crops from producers in Louisiana and Texas. Crop Production report TXT PDF