USDA cuts its corn crop estimate and lowers soybean stocks

The U.S. Department of Agriculture lowered its corn harvest estimate Tuesday and projected smaller end-of-season supplies of both corn and soybeans. The November forecasts put the focus on demand as well as the size of this year's crops.

A smaller corn crop

U.S. corn production is now forecast at 15.893 billion bushels, down 141 million from October. The estimated yield fell to 179.6 bushels per acre from 181.2, while the harvested-area estimate was unchanged.

USDA also reduced projected corn exports and feed use. Even with those demand cuts, estimated ending stocks fell to 1.758 billion bushels from 1.849 billion. Ending stocks are the supplies expected to remain after the marketing year's use and exports, not the size of the harvest itself.

More soybeans, but less left over

The soybean calculation moved differently. Estimated production rose 12 million bushels to 4.574 billion as the yield forecast increased to 53.3 bushels per acre from 53.1.

But projected exports rose by 25 million bushels, more than the increase in production. With a small increase in seed use and unchanged crushing demand, soybean ending stocks fell 15 million bushels to 300 million.

The price forecasts were mixed. USDA lowered the season-average corn farm price by 10 cents to $4.60 a bushel, while raising the soybean forecast by 10 cents to $12.10. These are marketing-year farm-price forecasts, not current futures quotes.

The global picture is different

Tighter projected U.S. supplies do not mean every global balance sheet is tightening. World corn ending stocks rose to about 281.9 million metric tons, while world soybean stocks fell to about 123.5 million.

The report therefore gives different signals for domestic and global supplies. Harvest estimates, export demand and future crops can still change these forecasts. A lower stock estimate alone is not a promise of higher prices.

Educational information only. Not personal investment advice.