Corn, soybean and wheat prices plummeted on Friday as the United States Department of Agriculture delivered some bearish data in the latest World Agricultural Supply and Demand Estimates (WASDE) report. Projections for a record corn yield in the U.S. and a significant boost to the soybean ending stocks had the markets reeling. After the dust settled, corn and wheat suffered double-digit losses, while soybean futures were down more than 40 cents, falling by almost 5% from the previous day.
The USDA raised its U.S. corn production forecast to 14.6 billion bushels, up 356 million from the July projection. The hefty increase stems from the season’s first survey-based corn yield forecast, which pegs the yield at a record 178.4 bushels per acre, 4.4 bushels higher than last month’s trend-based projection. The production estimate, however, is less than one per cent lower than last year. The report indicates that Illinois, Indiana, Nebraska, Ohio, North Dakota, and South Dakota are forecast to have yields above a year ago. The yield for Iowa is unchanged relative to last year, while Missouri, Minnesota, and Kansas are forecast below a year ago.
Exports are raised, which the USDA says reflects U.S. export competitiveness and expectations of reduced competition from Brazil. But with supply rising faster than use, ending stocks are estimated at close to 1.7 billion bushels, 132 million higher than the July projection.
The USDA is also boosting its prediction for U.S. soybean yields. The projection is now 51.6 bushels per acre, 3.1 bushels above last month and 2.5 bushels above last year. As a result, soybean production is forecast at close to 4.6 billion bushels, up 276 million from the July estimate and up 4 per cent from last year. With larger supplies, estimates for crush and exports are raised 15 and 20 million bushels, respectively. Ending stocks are projected at 785 million bushels, up 205 million from last month.
For wheat, the USDA lowered its production estimate by 4 million bushels to 1.877 billion on a slight reduction in winter wheat, durum, and other spring wheat production as indicated in the August crop production report from the National Agricultural Statistics Service.
Projected 2018/19 ending stocks are reduced 50 million bushels to 935 million, down 15 per cent from last year. Despite the outlook for lower production and stockpiles, wheat prices lost ground as the numbers weren’t as low as expected.