A negative report this morning from the US Department of Agriculture, which is forecasting record production for both corn and soybeans in the U.S. Corn production was estimated at 15.153 billion bushels with a yield of 175.1 bushels per acre.
The soybean harvest was seen at 4.060 billion bushels, with yields expected to average 48.9 bushels per acre. The Crop Production report indicates that almost all Corn Belt states, with the exception of Minnesota and South Dakota, are forecast to have yields above a year ago.
A month ago, the USDA had projected corn production at 14.540 billion bushels, based on an average yield of 168.0 bushels per acre, and soybean production at 3.880 billion bushels, based on an average yield of 46.7 bushels per acre.
Outside the USA, corn feeding is raised for Mexico, India and EU. Foreign corn production for 2016-'17 is raised 2.1 million tons with increases for Argentina, India and Mexico more than offsetting reductions for the European Union and Canada. Nine percent of corn has now dented, compared to 8% last year and the five-year average of 12%.
Prior to the report corn was down 3 cents, soybeans down 9 cents, and wheat was down 2 cents.
Domestic farmers in the US are poised to collect 3.948 billion bushels of the oilseed this season, the most ever and higher than the government's July forecast, according to a Bloomberg survey of 33 analysts and firms. "The question is now whether USDA will confirm that protein production is adequate to meet that demand or whether price rationing needs to occur". This USDA report is the first report using actual field samples of corn and soybeans to aid in determining production and yield estimates.
Things are looking up for the quality of this year's corn and soybeans in IN and around the Midwest. Record yields of 57 bushels per acre help offset the fewer wheat acres planted. Total production is forecast at 312.4 million bushels, up 14 percent from past year to a new record high. For 2015/16, global vegetable oil trade is expected to decline 1.5 million tons from last month due to lower palm oil production in Indonesia and Malaysia.
Soybeans for August delivery rose 5 1/4 cents, or 0.5%, to $10.22 1/4 a bushel at the Chicago Board of Trade.
USDA raised wheat domestic use for the new crop by 35 million bushels and also increased exports by 25 million bushels. All other spring wheat production is forecast at 571 million bushels, down 5 percent from 2015.
While a supply cut from OPEC could raise prices, skeptics point out that numerous member states, especially Saudi Arabia, have been increasing production in recent months, adding to the world's overwhelming supplies of petroleum, gasoline, and diesel fuel.
Kruger says demand was also increased, but not enough to curb the ending stocks figure which came in at 2.4 billion bushels for (16/17).