USDA crop report: Government shocks soy market with larger harvest forecast

USDA crop report: Government shocks soy market with larger harvest forecast

USDA trims projected corn harvest to 13.585 billion

See the October, 2015 USDA crop report.

USDA again shocked the soybean market by raising its forecast for this year's U.S. harvest to 3.935 billion bushels from its August number of 3.916 billion. Traders largely expected a smaller September number.

 Corn production was trimmed, as expected, to 13.585 billion from August's 13.686 billion.

The larger soybean forecast sent Chicago soybean futures sharply lower with contract lows set in the first three months, but prices later recovered to trade modestly lower.

"The soybean tally was disappointing, with USDA increasing its yield. The best hope for a smaller crop likely is with reduced acreage, but we'll have to wait for that," said Bryce Knorr, Farm Futures senior grain analyst..

Corn futures turned around after the report to trade about 7 cents higher in nearby months. They were about 4 cents lower before the report's release.

"USDA provided the corn market with a little good news, cutting new crop production modestly while holding demand at near-record levels," said Knorr. "While the cut in carryout was modest, it at least holds out potential for the crop to get smaller yet when results come in off the combine."

The government made no changes to its acreage estimates, "another factor that could trim the size of the crop," said Knorr.

In August, the corn and soybean markets received a bearish shock when USDA's crop numbers also topped forecasts.

Wheat markets were mostly higher on Friday, although USDA left production unchanged at 2.136 billion bushels and increased ending stocks 25 million bushels to 875 million by reducing exports by the same amount.

"All these markets must wrestle with volatile world markets. The surge in safe haven buying today suggests investors are worried about Chinese economic data coming out Sunday, which could also affect next week's decision by the Federal Reserve on whether or not to raise interest rates," concluded Knorr.

USDA crop report: Corn tries to rally after USDA cuts production estimate


USDA crop report: Corn tries to rally after USDA cuts production estimate

USDA crop report: Government shocks soy market with larger harvest forecast

USDA crop report: Government shocks soy market with larger harvest forecast

TAGS: USDA Marketing
Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish