The U.S. Agriculture Department on Friday surprisingly raised its forecast for domestic soybean production, based on expectations for record yields in key states such as Iowa, Minnesota and Nebraska.
The government lowered its forecast for corn production by more than expected in its monthly supply and demand report. But supplies, while lower than the previous crop year, will still be ample as the corn harvest will be the third largest on record if it matches the government’s outlook.
USDA pegged soybean production at 3.935 billion bushels, based on an average yield of 47.1 bushels per acre. Analysts, based on an average of estimates in a Reuters poll, had been expecting the report to show soybean harvest at 3.869 billion bushels and an average yield of 46.4 bushels per acre. In August, USDA forecast soybean production at 3.916 billion bushels, based on an average yield of 46.9 bushels per acre.
Corn production was seen at 13.585 billion bushels, down from the government’s August forecast of 13.686 billion bushels. It lowered its yield projection to 167.5 bushels per acre from 168.8 bushels per acre. Analysts had been expecting the report to show corn production at 13.599 billion bushels and an average yield of 167.6 bushels per acre.
USDA left its outlook for harvested acres unchanged at 81.101 million for corn and 83.549 million for soybeans.
The soybean domestic ending stocks outlook for the 2015/16 crop year was lowered by 20 million bushels to 450 million bushels, reflecting a cut to beginning stocks as well as increased demand from crushers. The 2014/15 soy end stocks view was lowered to 210 million bushels from 240 million bushels due to higher exports as well as crushings.
Analysts had been expecting soy ending stocks of 223 million bushels for 2014/15 and 415 million bushels for 2015/16.
For corn, U.S. ending stocks for 2015/16 were lowered to 1.592 billion bushels from 1.713 billion bushels, reflecting the cut to the production outlook. Corn ending stocks for 2014/15 were lowered by 40 million bushels to 1.732 billion bushels. Both were lower than market forecasts.
U.S. wheat ending stocks for 2015/16 were raised by 25 million bushels to 875 million bushels, 10 million above the average of trade estimates, due to a cut to the export outlook.