The latest corn and soybean production estimates by the U.S. Department of Agriculture depressed futures prices Tuesday and may leave farmers and grain elevators squeezed for space to store another record harvest.
The USDA on Monday forecast U.S. corn production at 15.09 billion bushels, exceeding the 14.95 billion average estimate from analysts surveyed by Bloomberg. Reserves before the 2017 harvest are expected to rise to the highest since 1988, boosting global inventories to an all-time high.
The USDA estimated domestic soybean production will rise to 114.33 million metric tons, up from the 106.93 million forecast last month after farmers planted record acres.
The agency is estimating U.S. soybean inventories before the 2017 harvest will rise 87 percent to 9.95 million tons, the highest in a decade.
Soybean futures in Chicago fell the most in two weeks after the agency released its report.
The “USDA got a lot more aggressive on yield than what the trade was expecting,” Ted Seifried, chief market strategist at Zaner Group in Chicago, said in a telephone interview with Bloomberg. Prices “should be under pressure on the idea that we’ve got to move a lot of beans in the next few months,” he said.
The USDA expects Iowa farmers will produce 2.67 billion bushels of corn, up from 2.5 billion bushels in 2015. Average yield is estimated at 196 bushels per acre, up from 192 bushels per acre last year.
East-central Iowa is expected to have the highest average yield in the state at 207 bushels per acre. Soybean production is forecast to be up in five Iowa districts and yields are expected to be higher in seven districts from last year.
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Acreage data released by the USDA’s Farm Service Agency (FSA) late on Monday suggested the corn and soybean harvested area may be even larger than the agency reported.
Based on the FSA data, the USDA may increase its corn acreage forecast by at least 200,000 acres in next month’s crop report and soybean area by at least 100,000 acres, analysts said.