The US is poised
for record corn and soybean harvests this year, but a disappointing wheat crop,
thanks to the "severe to exceptional drought" affecting most of the
The US Department
of Agriculture, in its first full forecasts for crops in 2014-15, pegged the
domestic corn crop at 13.935bn bushels (354,0m tonnes), up 10m bushels year on
year, despite a forecast of a 3.7m-acre drop in plantings, and slow progress in
In fact the USDA,
saying hopes for higher corn yields were "more than offsetting the
year-to-year reduction in planted area", said it was assuming that farmers
catch up on sowings delays, with many observers believing growers have made
strong progress this week.
The US soybean crop
was estimated at a record 3.78bn bushels (98.93m tonnes), up 261m bushels year
on year, boosted by all-time highs in both plantings and yield.
The US is the
world's largest producer of both crops, and is expected indeed to increase its
lead in soybeans over second-placed Brazil, for which a 91m-tonne harvest was
'Drought, winterkill, and freeze damage'
However, the wheat
crop was pegged at an eight-year low of 1.96bn bushels (53.43m tonnes), a
decline of 167m bushels year on year, a bigger drop than investors had forecast
from the Wasde.
USDA US wheat estimates, change on previous and (on market forecast)
End-stocks 2013-14: 583m bushels, unchanged, (-5m bushels)
End-stocks 2014-15: 540m bushels, n/a, (-13m bushels)
Hard red winter output: 746.16m bushels, n/a, (-35.8m bushels)
Soft red winter output: 447.09m bushels, n/a, (-19.9m bushels)
reflected setbacks to winter wheat in the Midwest and, in particular, the
southern Plains hard red winter wheat belt, where "drought, winterkill,
and freeze damage have impacted the potential yield results", the USDA
The hard red winter
crop, which accounts for most of US wheat production, was pegged at 746.2m
bushels, up only 2.1m bushels year on year, despite higher sowings and a figure
below market forecasts.
"Most of the
wheat growing areas in the southern Great Plains are in severe to exceptional
drought stages," the USDA said.
were noted elsewhere too, including in California, where "producers are
expected to harvest a record- low acreage due to exceptional drought in the
winter wheat growing area".
USDA US corn estimates, change on previous and (on market forecast)
End-stocks 2013-14: 1.146bn bushels, -185m bushels, (-168m bushels)
End-stocks 2014-15: 1.726bn bushels, n/a, (+54m bushels)
And the harvest of
soft red winter wheat - a lower protein variety used for the likes of making
biscuits and livestock feed, an the benchmark type traded in Chicago - was
pegged at 447.1m bushels, down 21% year on year, also a bigger decline than
expected by investors.
Although a dent to
production from lower sowings had been expected, the USDA also highlighted
"winterkill losses… across Illinois, Missouri, and Michigan where
cooler-than-normal spring temperatures coupled with higher-than-normal
precipitation throughout the winter, hampered crop development".
setbacks looks likely to underpin wheat prices, with farmers expected to
receive $6.65-7.95 a bushel for the grain over 2014-15, compared with an
average of $6.85 a bushel this season.
USDA US soybean estimates, change on previous and (on market forecast)
End-stocks 2013-14: 130m bushels, -5m bushels, (-4m bushels)
End-stocks 2014-15: 330m bushels, n/a, (+23m bushels)
harvests look set to ensure corn and soybean growers weaker prices.
receive $9.75-11.75 a bushel for this year's crop of soybeans, below the
$13.10 a bushel this season.
For corn, they will
get $3.85-4.55 a bushel, compared with $4.50-4.80 a bushel expected for
In Chicago, new
crop December corn, which had stood little changed before the report was
published, tumbled to stand 2.0% lower at $5.08 ¾ a bushel an hour after the
report was released.
New crop November
corn was 0.5 cents higher at $12.24 ½ a bushel.