US corn, soya and cotton crops bigger, stocks too

A trouble-free harvest at the end of a nearly ideal 2004 growing season is bringing record supplies of US corn, soyabeans and cotton, depressing farm prices, the government said on Friday. Farm-gate prices will retreat to low levels seen at the start of the decade when corn averaged $1.90 a bushel and soyabeans $4.95 a bushel, the US Agriculture Department said in its monthly update.
By contrast, last year's US corn crop fetched $2.42 a bushel and soyabeans $7.34 a bushel.
Grain analysts at the Chicago Board of Trade forecast declining grain and soyabean prices well into 2005.
"If South America produces a big bean crop next year, there will be even more pressure on prices," said Brian Basting, an analyst for Advance Trading Inc.
The USDA raised its crop estimates to 11.741 billion bushels (298.2 million tonnes) of corn, 3.150 billion bushels (85.74 million tonnes) of soyabeans and 22.54 million bales - all records.
That was an increase of 128 million bushels in the corn crop, 43 million bushels in soyabeans and 1 million bales of cotton. Texas growers accounted for 400,000 bales of the cotton rise.
With a vast harvest and static demand, the USDA forecast the largest soyabean surplus in 19 years - 460 million bushels (12.5 million tonnes) when the 2005 crop is ready for harvest.
The stockpile of US corn will total 1.819 billion bushels (46.2 million tonnes) next fall, the biggest in five years, while cotton expands to 7.5 million bales, the largest since 1982.
Analysts said the mammoth crops will ensure rich feedstocks for cattle, hogs and poultry, with plenty of corn left over for ethanol production. The renewable fuel uses 10 percent of the US corn crop.
The large soyabean supply should "offset anyone's fears about next year's rust problem," said private consultant John Schnittker, referring to the USDA's announcement on Wednesday that it found the first US mainland case of soyabean rust in Louisiana. The fungus which can drastically lower yields if not treated.
Soyabean prices initially fell in CBOT futures trading, before reversing direction as speculators covered short positions before the November contract expired. Soyabeans for delivery in January sold for $5.25-1/2, up 5 cents, at midday. December corn was up 3 cents, at 2.00-1/4 a bushel. December wheat was down one-half cent at $3.02-1/4 a bushel.
Previous US crop records were 10.113 billion bushels of corn in 2003, 2.891 billion bushels of soyabeans in 2001 and 20.30 million bales of cotton in 2001.
This year's mammoth crops were fuelled by record per-acre yields of 160.2 bushels for corn, 42.6 bushels for soyabeans and 818 pounds for cotton. It would be the first time cotton yields topped 800 pounds or corn went above 160 bushels an acre.