Once again, the United States — one of the agricultural giants of the world and the largest farm exporter — is awash in grain. Stockpiles of corn and soybeans are far larger than expected and the fall harvest could see record corn production and the third bumper soybean crop in a row.
Another round of large crops will weigh on commodity prices and, in turn, farm income.
In its annual Acreage report, USDA said farmers responded to strengthening soybean prices by planting a record 83.7 million acres of the oilseed, 2 percent more than they planned in March. Corn, cotton, rice and sorghum plantings were larger than expected by analysts. Overall, growers planted 323.4 million acres to the two dozen “principal crops,” up 4.9 million acres from last year.
With normal weather and yields that match USDA projections, the corn crop would be a record 14.5 billion bushels, or 2 percent larger than the record set in 2014. The soybean crop would be nearly 3.9 billion bushels, trailing only the 3.929 billion bushels harvested last year and 3.927 billion bushels in 2014. The potential wheat crop of 2.1 billion bushels would prevent any sizable reduction in a surplus that equals a six-month supply.
At the trend-setting Chicago futures markets, corn for delivery in December ended the day at $2.71-1/4 a bushel, down 2.2 percent. August soybeans rose by 3.1 percent, to $11.74-1/4 a bushel, for the day. Wheat closed with a marginal upturn in price. Corn prices fell because of the larger-than-expected stocks and plantings, said Agrimoney. Soybeans rose because the planted area was not quite as large as expected and exports are strong.
Along with the Acreage report, USDA released the quarterly Grain Stocks report. The survey of farmers and warehouses indicated the corn stockpile was 4 percent, and soybeans 5 percent, larger than expected by traders, with three months before the fall harvest begins.
Cotton growers told USDA they planted 10 million acres, up 17 percent from last year and well above trade expectations. Cotton prices are the lowest in year but the crop offers a better chance of a profit than alternatives.