USDA is projecting corn and soybean yields at record highs this year and has sharply raised its forecast for both soybean production and ending stocks, prompting another drop on the futures markets Monday.
USDA estimated Tuesday that soybean production would reach a record 4.59 billion bushels, a 10% increase from 2023. Soybean yields are expected to average 53.2 bushels per acre, an increase of 2.6 bushels from last year.
USDA raised ending stocks for the 2024-25 marketing year to 560 million bushels, up from the July forecast of 435 million bushels.
USDA reduced its estimate of the season-average farm-gate price for soybeans by 30 cents to $10.80 a bushel. The average price was $12.50 a bushel for last year's crop and $14.20 for the 2022 harvest.
Soybean futures dropped below $10 a bushel and were down about 20 cents to $9.82 a couple of hours after USDA released its monthly Crop Production report and World Agricultural Supply and Demand Estimates. Corn futures were trading higher after the reports.
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The forecast for yield and production easily beat analysts’ estimates.
“Expectations were for a little bit of a drop, given the flooding rains that we saw in some areas of the northwestern corn and bean belt in early June,” said Mark Soderberg, a market analyst for ADM Investor Services. The average trade estimate for production was 4.47 billion bushels, according to Reuters.
He said the strengthening in corn prices was likely due to a reduction in USDA’s forecast for global stocks.
U.S. farmers are expected to produce 15.1 billion bushels of corn, a drop of 1% from 2023, reflecting a decline in planted area this year, but this year’s crop would still be the third largest on record, USDA said.
Corn yields are expected to average 183.1 bushels per acre, an increase of 5.8 bushels from last year. Among the major corn-producing states, yields are expected to be higher in Illinois, Indiana, Iowa, Missouri, Nebraska, and South Dakota, USDA said.
Corn ending stocks were lowered 24 million bushels to 2.1 billion, but USDA reduced its estimate of the average farm-gate price for corn by 10 cents to $4.20 per bushel, down from $4.65 for last year's crop.
Cotton production is projected to be 25% higher in 2024 over last year, with farmers expected to harvest 8.63 million acres this fall, a 34% increase from 2023.
