In its first estimate of the fall harvest, the USDA said farmers will harvest a record soybean crop for the fourth consecutive year, fattening a large global stockpile. The government forecast of the corn crop also was larger than expected, with USDA saying this year’s crop would sell for the lowest price per bushel in 11 years because of ample supplies.
Large crops and stable commodity prices will help minimize food inflation, now forecast for a negligible 1.5 percent this year and 2 percent in 2018, below the average 20-year average of 2.5 percent.
In its closely monitored August crop report, the USDA forecast a soybean crop of 4.381 billion bushels, 2 percent larger than the record set last year. Despite a rainy spring that delayed plantings and hot July weather in the western Corn Belt, soybean yields will be higher than expected, said USDA. Growers planted a record amount of land to soybeans this spring in the belief the crop would be more profitable than corn, weighed down by a large stockpile.
This year’s corn will be the third-largest on record at 14.153 billion bushels, said USDA. Corn demand by exporters, processors, livestock feeders and ethanol makers was forecast at 14.3 billion bushels, providing little chance to whittle down a stockpile expected to total 2.37 billion bushels – a two-month supply – when the fall harvest begins. The season average price for the crop, estimated at $3.30 a bushel, would be lowest since the 2006 crop.
Counting this year’s crop, the five largest U.S. corn crops have been produced since 2013 while soybean production has climbed ever higher since 2014.
Corn, soybean and wheat futures prices fell at the trend-setting Chicago Board of Trade following the USDA forecasts. Corn for delivery in December fell by 4 percent to its lowest price in 10 months, November soybeans dropped by 3 percent to the lowest price since June and September wheat set a two-month low, said Agrimoney.
Corn and soybeans are the most widely planted U.S. crops. With wheat, the No. 3 crop, they are the foundation of the American diet. Wheat is the leader among the three for direct consumption by humans in the form of bread and pasta. Corn and soybeans are ingredients in processed food, provide rations for livestock, and are used by industry, including for fuel production.