CHICAGO (Reuters) - The U.S. Agriculture Department surprisingly trimmed its forecasts for both domestic corn and soybean production on Thursday, with the soy cut stemming from a reduction in acres while the corn harvest will be lower due to smaller-than-expected yields.
Soybean production was seen falling from the government’s September estimate due to a decrease in harvested acres in key states such as Illinois and Minnesota.
Despite the cuts, the U.S. soybean crop was still projected as the biggest ever, while corn harvest was pegged as the second-biggest on record.
The corn crop was seen at 14.778 billion bushels, based on an average record yield of 180.7 bushels per acre, the government said in its monthly supply and demand report. Soybean production was pegged at 4.690 billion bushels, with yields averaging a record 53.1 bushels per acre.
“It’s still a very big crop,” said Bob Utterback, president of Utterback Marketing. “It’s not as bad as we thought it could have been. With the rain delays, I think the trade is going to take the attitude that (yields) could shift down a little.”
Analysts had been expecting corn production of 14.872 billion bushels, with yields of 181.8 bushels per acre, and soybean production of 4.733 billion bushels, with yields of 53.3 bushels per acre, based on the average of estimates given in a Reuters poll.
In September, USDA had forecast a corn crop of 14.827 billion bushels and a soybean crop of 4.693 billion bushels.
Chicago Board of Trade corn and soybean futures, which had traded lower for most of the morning, turned higher after the report. CBOT December corn led the gains, rising 1.7 percent to its highest level in more than seven weeks.
“It makes you wonder what happens if the yield comes down even more, especially with the weather that we’ve got,” said Ted Seifried, chief agriculture market strategist for brokerage Zaner Group in Chicago. “The low is in for corn.”
USDA estimated harvested soybean acres at 88.348 million, and harvested acres for corn at 81.767 million.
USDA raised corn ending stocks for the 2018/19 crop year to 1.813 billion bushels and soybean ending stocks to 885 million bushels, both lower than analysts were expecting. If realized, the soybean ending stocks would be the biggest on record.
U.S. wheat ending stocks were raised to 956 million bushels from 935 million bushels.
Reporting by Mark Weinraub in Chicago; Additional reporting by Tom Polansek and Karl Plume in Chicago; Editing by Matthew Lewis