The September crop report and the companion WASDE report from USDA add weight to forecasts of an era of low commodity prices ahead. A University of Missouri think tank projects corn in the low $4 a bushel range for the rest of the decade while soybeans sink below $10 a bushel in 2015 and struggle for years to recover. Only two years ago, corn and soybean prices set record highs.
USDA estimated the corn crop at 14.395 billion bushels and soybeans at 3.913 billion bushels, both up 3 percent from the previous estimate and larger than traders expected. Futures prices fell on prospects of mammoth supplies. Corn for delivery in December closed at $3.41 a bushel, down 1.4 percent, at the Chicago Board of Trade. November soybeans ended at $9.81-1/2 a bushel, down 1.2 percent, and December wheat was down 2 percent, to $5.09-1/2 a bushel, said AgriMoney.
A few hours before the USDA crop report, the UN Food and Agriculture Organization said global grain inventories would swell to a 15-year high by the close of this season, the result of back-to-back bumper harvests. USDA’s estimates of corn and soybean stocks at the end of the current marketing year were large than expected and the corn estimate was barely below expectations. The U.S. soybean carryover would triple in size this year and corn zoom by 40 percent.
The United States is the world’s largest agricultural exporter, as well as the top corn and soybean producer, so USDA’s forecasts of domestic crops and usage carry global impact. USDA cut its estimate of China’s corn crop by 2 percent due to persistent dry weather in key growing regions. China is the No 2 corn grower. USDA raised its forecast of soybeans in Brazil, the No 2 grower, by 3 percent, to a record 94 million tonnes.