More: For the latest crop production estimates, view the September, 2014, USDA crop report summary.
U.S. farmers can expect record corn and soybean harvests this fall if the two crops continue to enjoy favorable weather, according to Tuesday’s USDA crop production report.
While USDA raised its forecasts for U.S. corn and soybean production from its July outlook, analysts had expected even larger crops due to nearly ideal growing weather this summer with plentiful moisture and a lack of harmful hot weather.
USDA forecast the corn crop at 14.03 billion bushels, up from its July forecast of 13.86 billion and from the 2013 harvest of 13.925 billion. The soybean crop at 3.816 billion would be up from July’s 3.8 billion forecast and from 2013’s 3.3 billion.
Farm Futures had forecast 14.331 billion for corn and 3.857 billion for soybeans, while estimates in a Reuters survey averaged 14.253 billion and 3.823 billion.
“USDA’s estimates for corn were the best news that market has gotten in a while, which encouraged funds to cover some of their bearish bet,” said Bryce Knorr, Farm Futures senior analyst. “If USDA’s current projection holds, futures really don’t have to go a whole lot lower to be fairly priced. Any improvement in demand or hiccups in production now would tighten carryout more, so if you’re short there’s no point in pressing your luck.”
In Chicago’s grain markets, corn futures traded slightly higher near midday after being 3 to 5 cents a bushel lower following the report. New-crop November soybean futures dropped about 30 cents shortly after the report, but later recovered much of that loss. Wheat markets were lower before and after the reports with only minor changes seen.
Good news for corn market >>
The Midwest corn and soybean harvests are still a month or more away, but the crops have largely passed the critical development phases that determine yields and now USDA expects record yields for both. It forecast corn at 167.4 bushels and soybeans at 45.4.
USDA raised year-end stocks for 2014/2015 for corn and soybeans to 1.808 billion and 430 million from July’s 1.801 billion and 415 million. Analysts, on average, expected corn at 2.005 billion for corn and 414 million for corn, with Farm Futures at 1.981 billion and 386 million.
“The news for soybeans was not so friendly, at least as far as ending stocks are concerned. USDA was conservative in its estimate of 2014 production, but remains very cautious in its demand forecast. Both crush and exports look better than the agency estimates, but it typically takes a slow approach on these,” said Knorr.
U.S. wheat production was raised to 2.03 billion bushels, up 2% from July, due to increases in hard red winter, soft red winter, spring wheat and durum. Last year’s crop was 2.13 billion.
Spring wheat production went to 572 million bushels from July’s 565 million. An increase had been expected after crop scouts, who recently toured those fields, had forecast a record average yield if the conditions continued through harvest.
Hard red winter wheat production was raised to 729 million bushels from July’s 703 milllion because of better yields in northern areas compared with the drought-damaged crop in the southern and central Plains.
Big wheat crop in Russia
USDA raised global wheat production 10.9 million metric tons to a record 716.1 million, largely due to a 6 million increase in Russia’s crop to 59 million. Ukraine’s crop was raised 1 million to 22 million.
“The Russia and Ukraine increases are based on harvest reports that indicate very high winter wheat yields, especially for Russia,” USDA said.
USDA also raised global wheat consumption by 6.9 million metric tons as harvest-time rain will have much of the European crop being fed.
Global oilseed production was trimmed to 521.8 million metric tons from July, due in part to a late monsoon reducing soybean acreage in India, and by expected lower canola, or rapeseed, production in Canada and lower sunflower seed harvest in Russia.
Review the full August USDA reports on the USDA website.