USDA Cuts Corn Crop Forecast as Futures Rise 2.9%

The corn estimate fell from 16.03 billion bushels in October and came in below the 15.94 billion bushels projected in a Wall Street Journal survey. The USDA also cut its expected yield to 179.6 bushels per acre, from 181.2 in October and below the survey’s 180.5. The corn harvest was 81% complete as of Sunday.

For soybeans, the department raised its production estimate to 4.57 billion bushels from 4.56 billion, with yields forecast at 53.3 bushels per acre, up from 53.1. Both figures were below survey estimates of 4.6 billion bushels and 53.6 bushels per acre. The soybean harvest was 92% complete as of Sunday.

Corn futures rose 2.9% on the Chicago Board of Trade after the report; soybeans gained 3.2%. Funds had liquidated sizable long corn positions after an unexpectedly large crop increase in October, and the Commodity Futures Trading Commission reported a net short corn position Friday. Soybeans, despite a recent selloff, remained in a net long position.

“USDA's data was bullish for corn and soybeans,” said Brian Grete, senior grain and livestock analyst at Commstock Investments. He said corn ending stocks fell more than expected and soybean ending stocks declined unexpectedly despite the higher production estimate. Grete said the report would “cement seasonal lows” after two months of price pressure and could support a recovery as attention shifts to demand and South American production.

The USDA cut projected corn ending stocks to 1.76 billion bushels from 1.85 billion, below the survey’s 1.83 billion. Soybean ending stocks were lowered to 300 million bushels from 315 million, compared with the survey’s 336 million. Wheat stocks were forecast at 743 million bushels, up from 740 million in the prior estimate and just under the survey’s 747 million.

The department reduced its corn export forecast by 25 million bushels to 3.28 billion and increased its soybean export forecast by 25 million to 1.72 billion.