USDA forecasts record corn, soy harvests

Corn futures drop to lowest in nearly seven years

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The U.S. harvests of soybeans and corn this fall will each be the largest ever, according to a U.S. Department of Agriculture monthly outlook that boosted yield and production forecasts for both crops above market expectations.

The USDA on Friday pegged the corn crop at 15.153 billion bushels, based on an average yield of 175.1 bushels per acre while the soybean harvest was seen at 4.060 billion bushels, with yields expected to average 48.9 bushels per acre.

The forecast for corn and soy harvests and yield topped market expectations.

In Iowa, the biggest corn producer, average yield is forecast at 197 bushels per acre, up from 192 bushels per acre in 2015.

Iowa soybean production is forecast at 516 million bushels, down from 553,7 million bushels in 2015. Iowa average soybean yield is forecast at 57 bushels per acre, up slightly from 56.5 bushels per acre in 2015.

Corn futures sank to their lowest in nearly seven years immediately after the report was released while soybeans hit a one-week low.

“It’s an astounding number, both the beans and the corn above the average guess,” said Jack Scoville, analyst at the Price Futures Group. “What more do you need to know?”

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

The 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.

The massive crops would outstrip the rising demand trend. The 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.

Corn ending stocks 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.

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