USDA Projections for Corn, Beans Well Beyond Expectations
The U.S. Department of Agriculture raised its projections for corn production well beyond expectations in a monthly report on Friday.
Corn output in the 2016-17 marketing year that starts September 1 is forecast by the government at 15.2 billion bushels, up from 14.5 billion projected last month and analyst expectations of 14.8 billion, the USDA said in its monthly World Agricultural Supply and Demand Estimates report on Friday.
Yield is pegged at 175.1 bushels an acre, up from July’s projection of 168 bushels and analyst estimates of 170.8 bushels an acre. Stockpiles at the end of the 2016-17 year are expected to be 2.41 billion bushels, well above last month’s 2.08 billion and the trade’s outlook for 2.29 billion, the USDA said. Corn exports will total 2.18 billion next year, up from 2.05 billion projected in July.
Soybean production is forecast at 4.06 billion bushels, well above the July forecast of 3.88 billion bushels and expectations for 3.95 billion. Yield is forecast at 48.9 bushels an acre, the USDA said, topping last month’s outlook for 46.7 bushels and estimates for 47.6 bushels an acre.
Carryout is forecast at 330 million bushels, up from last month’s projection for 290 million bushels and above projections for 323 million. Soybean exports in the 2016-17 marketing year are pegged at 1.95 billion bushels, above the 1.92 billion forecast last month.
While the numbers beat expectations, there’s still a lot of time left for yields to decline, said Frank J. Cholly, a senior commodities broker at RJO Futures in Chicago, who believes the USDA expectations are still too lofty.
“They are big numbers, but they’re still to be determined,” he said. “The (USDA) is expecting an awful lot. I think they’re kind of overestimating the size of the crop. We’ve had mostly ideal weather conditions, but record yields are yet to be determined. We’re going to continue to focus on the weather and whether these crop ratings move south a little bit. A lot of areas have been dry for a month now.”
Ohio and parts of northern Illinois, where a lot of corn is grown, have both been dry recently, Cholly said.
“I wouldn't be surprised to see some heat stress, and these yields not getting north of 170 (bushels an acre), and on soybeans, I think the (USDA) is way underestimating on the demand side.”