USDA sees record U.S. corn, soy crops after good July weather

Washington | Reuters — The U.S. soybean and corn harvests will be the biggest ever this fall, according to a U.S. Agriculture Department monthly outlook that boosted yield and production forecasts for both crops above market expectations.

USDA on Friday pegged the corn crop at 15.153 billion bushels, based on an average yield of 175.1 bushels per acre. That topped analysts’ forecasts that ranged from 14.580 billion to 15.146 billion for production and 168.6 to 175 for yield.

The soybean harvest was seen at 4.06 billion bushels, with yields expected to average 48.9 bushels per acre. Analysts’ soybean estimates ranged from 3.865 billion to 4.054 billion for production and 46.7 to 48.8 for yield.

A month ago, USDA had projected corn production at 14.54 billion bushels, based on an average yield of 168 bushels per acre, and soybean production at 3.88 billion bushels, based on an average yield of 46.7 bushels per acre.

Good weather for crop development during July across broad swaths of the U.S. Midwest, the key growing area for corn and soybeans, allowed crops to mature with relatively little stress.

USDA forecast corn yields for Illinois, the second biggest state for production of the yellow grain, at 200 bushels per acre. If realized, that would be 25 bushels per acre higher than in 2015.

In Iowa, the biggest corn producer, yields were forecast at 197 bushels per acre, up from 192 bushels per acre in 2015.

The massive crops would outstrip the rising demand trend. USDA boosted its supply outlook for the upcoming marketing year to reflect the expected bumper harvest.

For soybeans, domestic ending stocks were seen at 330 million bushels, up 40 million bushels from the government’s July estimate. Analysts, on average, were expecting 2016-17 soybean ending stocks of 316 million bushels, according to a Reuters poll.

USDA also boosted its 2016-17 soybean export forecast by 30 million bushels and its outlook for crushings by 15 million bushels.

Rising export demand caused the government to cut its outlook for old-crop soybean ending stocks to a smaller-than-expected 255 million bushels from 350 million bushels. It raised its 2015-16 soy export forecast by 85 million bushels.

Corn ending stocks for 2016-17 were raised to a bigger-than-expected 2.409 billion bushels from 2.081 billion despite a 125-million bushel increase in the export outlook and a 175-million bushel increase to feed and residual usage.

Old-crop corn ending stocks were pegged at 1.706 billion bushels, up just five million bushels from July.

— Mark Weinraub is a Reuters correspondent covering grain markets based in Chicago.