Market News & Headlines >> Huge Crops to Keep Lid on Corn, Soybean Prices
Friday’s huge corn and soybean crop estimates from USDA, which topped trade expectations are expected to keep prices under pressure during 2016-17.
USDA projected 2016 U.S. corn production at a record 15.153 billion bushels on a record high average yield of 175.1 bushels per acre topping trade expectations that averaged 14.772 billion bushels in a range from 14.462-15.146 billion, according to a Bloomberg News survey of 33 analysts. At the forecast level, annual U.S. corn production would be up 11.3% from last year’s 13.601 billion bushels and would easily top the previous record of 14.216 billion bushels set in 2014 and the U.S. average yield would top the 2014 record by 4.1 bushels.
USDA forecast 2016 U.S. soybean production at record 4.060 billion bushels on a record high average yield of 48.9 bushels per acre, topping trade expectations that averaged 3.948 billion bushels in a range from 3.865-4.054 billion. At USDA’s forecast level, U.S. soybean production would be up 3.3% from last year’s record 3.929 billion bushel crop, while the average yield would top last year’s record by 0.9 bushels.
Although USDA raised its usage expectations for both corn and soybeans due primarily to strong export demand, it lowered its forecast range for the 2016-17 average on-farm price of corn by a dime on each end to $3.10-$3.70 and cut its forecast range for the 2016/17 on-farm price of soybeans by 40 cents on each end to $8.35-$9.85.
The record U.S. corn crop estimate was driven by big yield improvement in states where productivity was hurt by excessive rains and flooding last year - the average yield was up 25 bushels per acre versus last year in Illinois; up 24 bushels from last year in Missouri; up 37 in Indiana and even up 10 in Ohio, which has dealt with drought this summer. USDA also found higher yields in Iowa, Nebraska and Wisconsin, while yields were down from last year in South Dakota, Michigan, Minnesota and Kansas.
For soybeans, three of the top four producing states, Iowa, Illinois and Nebraska are expected to see small yield increases of 0.5-1.0 bushels per acre over last year’s strong yields. The average yield was forcast to be down by 3.0 bushels per acre to 47.0 bushels in Minnesota. The big yield gains are in Missouri - plus 7.5 bushels vs. last year and Indiana, plus 5.0 bushels. S. Dakota, minus 4 bushels and Michigan, minus 4 bushels, were the only other major growing states besides Minnesota with lower yields versus last year.