The U.S. Agriculture Department said on Monday that record U.S. soybean yields and production would be higher than previously forecast due to improved crop conditions during August, a critical development period for the oilseed.
The USDA, in issuing its latest monthly U.S. crop forecasts, also trimmed its corn production and yield projections from its August outlook. Even so, they were pegged near the high end of analysts’ forecasts and USDA reiterated its expectation for a record harvest of the yellow grain.
The increased soybean production outlook outstripped rising demand from the domestic and export sectors, and USDA raised its outlook for supplies left at the end of the 2016/17 marketing year, commonly referred to as end stocks.
For corn, 2016/17 U.S. end stocks were lowered by 25 million bushels to reflect the reduced harvest expectations but remained on track to be the biggest since the 1987/88 marketing year.
“USDA increased (soybean) crush for next year and exports for next year, but you still ended up with production outweighing the demand increases,” said Jim Gerlach, president of A/C Trading in Indiana.
Soybean futures fell to session lows after the report was released. Corn also hit a session low but quickly recovered its losses to hover around unchanged.
USDA left its domestic wheat end stocks view unchanged in its supply and demand report, roughly in line with market expectations.
In the monthly update, USDA forecast the 2016/17 U.S. soybean crop at 4.201 billion bushels, based on an average yield of 50.6 bushels per acre. That topped analysts’ forecasts that ranged from 4.019 billion bushels to 4.162 billion bushels for production and 48.1 bushels per acre to 50.1 bushels per acre for yield.
Corn production was seen at 15.093 billion bushels, down from the government’s August estimate of 15.153 billion bushels. USDA lowered its corn yield view by 0.7 bushels per acre to 174.4 bushels per acre.
On the supply side, the government cut its 2015/16 soybean ending stocks view to 195 million bushels from 255 million bushels. Analysts, on average, had expected 2015/16 soy ending stocks of 232 million bushels. The move reflected a 60 million-bushel increase in exports for the marketing year.
For 2016/17, USDA pegged soybean ending stocks at 365 million bushels, up from 330 million bushels in its August report, due to the increased harvest view.
The government said 2015/16 U.S. corn ending stocks would be 1.716 billion bushels, up 10 million from August due to lower exports. For 2016/17, domestic corn stocks were pegged at 2.384 billion bushels.
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