Record-breaking corn-for-grain production forecast increases again

Gladys Abbott
November 12, 2017

Harvested area remained unchanged from October estimates, remaining at a record 89.5 million acres.

Grain markets were dampened on Thursday by the U.S. Department of Agriculture's (USDA) monthly crop forecasts, which included a record forecast for this year's U.S. corn harvest yield. Unfortunately, the +150 million bushel bump in total demand was more than offset by the massive bump in yield. But an estimated 2.14 million acres will be run through the combines in 2017-breaking the previous record set past year.

The Chicago Board of Trade most-active corn contract is down around 2 percent this week, marking on Thursday its lowest since November 2016 at $3.40-3/4 a bushel.

Global course grain production is an estimated at 125.9 million bushels higher, for a total of 52.0681 billion bushels. Nationally, soybean farmers are expected to harvest a record 4.43 billion bushels, which is three percent more than last year's all-time record production. US soybean tumbled on Thursday after USDA projected a record - large 2017 USA crop and unexpectedly left its average yield forecas t unchanged in a monthly report.

Paris wheat futures ended slightly higher on Friday, coming off an earlier one-week low, as Chicago grain prices steadied after a day-earlier slide sparked by a forecast for a record USA corn yield. NOTE: All figures listed in billions of bushels.

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The USDA production and yield estimates all were above average trade expectations of 14.323 billion bushels and 172.3 bushels an acre for corn and 4.404 billion bushels and 49.2 bushels an acre for soybeans, respectively. Argentina and Brazilian production was left "unchanged".

CBOT brokers reported that funds bought 3,100 contracts of corn, 1,900 contracts of wheat, and 2,400 contracts of soybeans.

Today's close will say a lot about the tone of the soybean market, Knorr adds. Ending stocks are 935 million bushels, which is 246 million bushels lower than a year ago but still ahead of the five-year average.

The world is nevertheless still well supplied with wheat. The projected average farm price for 2017/18 held steady at $4.40 to $4.80 per bushel.

The USDA forecast soybean carryover on September 1, 2018, at 425 million bus. "That's actually in line with what my models have been showing, though I didn't expect the agency to make a change yet".

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