Record yields fuel increase to USDA corn harvest view

The US corn crop will be bigger than expected as harvest yields came in at record levels despite some concerns about the crop throughout the growing season, government data showed on Thursday. The US Agriculture Department in its monthly supply and demand report said the bumper corn harvest will raise stockpiles of the yellow grain even as exports and usage from the feed sector rise from its previous estimates for the 2017/18 marketing year.
In its crop production report, USDA also trimmed its estimate of the soyabean harvest from its October outlook. Despite the cut, soyabean production was still expected to come in as the biggest ever. Corn and soyabean futures turned lower after the reports were released, with the most-active Chicago Board of Trade March corn contract threatening to hit its all-time low.
But weakness in futures was kept in check as analysts said that recent declines have left the market fairly priced, even with the bearish report. "There's nothing bullish here, but we've been beating on (corn) for so long," said Jack Scoville, analyst at Price Futures Group. USDA pegged the corn crop at 14.578 billion bushels, based on an average yield of 175.4 bushels per acre. That compares with its October production outlook of 14.280 billion bushels, based on an average yield of 171.8 bushels per acre.
Analysts had been expecting a corn production figure between 14.250 billion bushels and 14.459 billion bushels, based on estimates given in a Reuters survey. If realized, the government's corn yield projection would top the previous record of 174.6 bushels per acre reached in 2016.
In Iowa and Illinois, the two largest production states for corn, USDA boosted its average yield by 6 bushels per acre from its October estimate. For soyabeans, USDA pegged the crop at 4.425 billion bushels, topping the average of analysts' estimates. USDA left its soyabean yield projection at 49.5 bushels per acre.
US ending stocks of corn were seen at 2.487 billion bushels, 147 million bushels higher than the October view. USDA raised both exports and feed and residual sector usage by 75 million bushels. USDA lowered its soyabean ending stocks outlook by 5 million bushels to 425 million. For wheat, USDA cut ending stocks by 25 million bushels to 935 million bushels. It raised its export outlook by 25 million bushels to 1.0 billion due to recent sales of hard red winter wheat to Iraq.