Corn, soybean futures higher on lower output expectations

THE U.S. DEPARTMENT OF AGRICULTURE last week unexpectedly lowered its forecast for corn and soybean production in the 2018-2019 marketing year, which began September 1.

Output of the grain is now pegged at 14.778 billion bushels this year, down from 14.827 billion forecast a month ago. Yield projections also were lower at 180.7 bushels an acre, down from 181.3 bushels seen in September.

Analysts had expected an increase in production to 14.851 billion to 14.859 billion bushels.

Yield projections ranged from 181.3 to 181.8 bushels an acre while harvested acres, were left unchanged at 181.8 bushels an acre, the USDA said.

Inventories at the end of the marketing year on Aug. 31 are now seen at 1.813 billion bushels, up from last month’s outlook for 1.774 billion, but still well below forecasts for 1.913 billion to 1.919 billion bushels.

Soybean production is now pegged at 4.69 billion bushels. Analysts had forecast output in a range from 4.722 billion to 4.733 billion bushels after September’s projection of 4.693 billion bushels.

Yields are expected to be 53.1 bushels an acre, topping last month’s bushel projection, but still below the 53.3 to 53.4 bushels an acre forecast by analysts.

Inventories at the end of the 2018-2019 marketing year are expected by the government to be about 885 million bushels, the USDA said, up from the September forecast of 845 million and within the range of forecasts from 860 million to 905 million.

Soybeans for November delivery jumped 9¢ to $8.61 a bushel on the Chicago Board of Trade after the report. Soymeal was up $2.80 to $318.50 a short tonne and soy oil added 0.04¢ top 28.97¢ a pound.

December corn added 8 ¢ to $3.71 half a bushel after the report.

Wheat stockpiles, meanwhile, likely will come in at 956 million bushels at the end of the grain’s marketing year on May 31.

That’s up from last month’s outlook for 935 million and analyst expectations, for 950 million.

Still, wheat for December delivery rose 7¢ to $5.17 three-quarter a bushel and Kansas City futures added 7¢ to $5.23 a bushel.

USDA cuts estimate for 2018-19 domestic soybean production by 3 million bushels