The Agriculture Department lowered its estimates of the corn and wheat crops marginally and raised its estimate of the soybean crop by 1 percent in its monthly crop report. The wheat crop was reduced by 10 million bushels following a re-survey of growers in durum and spring wheat states. Corn was reduced due to lower yields in No 1 producer Iowa and the upper Midwest. USDA raised the soybean forecast on higher yields. The corn and soybean crops are record large this year.
Corn growers will sell their crop for an average $3.50 a bushel, estimated USDA, a 10-cent increase from its previous estimate. Soybeans are forecast to fetch an average $10 at the farm gate and wheat, $5.90. It would be the lowest season-average corn and soybean price in five years, and well below the records set during the 2012 drought. The low prices reflect mammoth supplies – the corn inventory at the end of this marketing year would be the largest in a decade. The soybean carry-over would be the largest in eight years.
“The big story this year,” says economist Darrel Good of U-Illinois, is that corn and soybean supplies are not onerously large. The corn stocks-to-use ratio would be 15 percent and the soybean ratio would be 12 percent – ample but not burdensome. “While the large harvest this year will keep prices at relatively low levels, particularly for corn, the odds now favor prices that will be profitable for both corn and soybean producers in 2015-16,” wrote Good at farmdoc daily.