Record corn, soy crops on the horizon, traders say

The government will update its projections of the corn and soybean crops tomorrow at noon ET with analysts expecting a record-setting fall harvest. If the expectations prove true, the second year in a row of mammoth crops would leave the country awash in grain and drive down commodity prices. At Chicago, corn for delivery in December closed on Wednesday at $3.98 a bushel, down 1.6 percent for the day; in May, corn sold for more than $5, said Agrimoney.

In a survey, traders said they expect USDA to project record crops of corn, at 13.945 billion bushels and soybeans, at 3.774 billion bushels with 2014/15 ending stocks of 1.774 billion bushels of corn, the largest in nine years, and 418 million bushels of soybeans, the largest in eight years. USDA has projected record corn and soybean yields this year, a key factor for record-large crops.

Purdue economist David Widmar said in a blog that a corn yield of 180-190 bushels an acre is in the realm of statistical possibility but cautioned, “there is no way to know, today, how this year’s corn crop will develop and mature.” In a similar exercise, University of Illinois economists Scott Irwin and Darrel Good said at farmdoc daily, “Expectations of a U.S. average corn yield above trend value in 2014 seem justified by current crop condition ratings.” They discussed factors that could push the U.S. average yield into the stratosphere.

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