The U.S. corn harvest will be bigger than previously forecast, the U.S. Agriculture Department said on Monday, as the government issued a surprise boost to its outlook despite concerns about a wet spring and dry summer.
For the 2019/20 crop year, the corn harvest will total 13.901 billion bushels, based on an average yield of 169.5 bushels per acre, the USDA predicted in its monthly supply and demand report. Farmers seeded 90.0 million acres with corn and were expected to harvest 82.0 million acres of the yellow grain.
All of the corn data topped the high end of analysts' estimates given in a Reuters poll, including a yield forecast at 164.0 bushels per acre.
"The yield going up in corn was shocking, because the crop condition ratings have been going down," said Bob Utterback, of Utterback Marketing. He said the data suggested improving prospects in Missouri and Minnesota and parts of Iowa were offsetting the rest of the Midwest.
USDA trimmed its outlook for soybean production, keeping its yield expectation unchanged but cutting its acreage estimates. It also lowered its export forecast for the 2019/20 marketing year by 100 million bushels to 1.775 billion as China cuts its purchases due to an escalating trade war with the United States.
USDA has slashed 175 million bushels from its soy export forecast since issuing its initial outlook for the marketing year in May.
Chicago Board of Trade corn futures fell sharply after the report was released, with the most-active contract down 6%, on track for its biggest daily percentage loss since July 2016. Most contracts fell their daily 25-cent bushel limit. Wheat also was down sharply, plunging 5.9%, while soybeans were off 1.3%.
Soybean production was pegged at 3.680 billion bushels, based on an average yield of 48.5 bushels per acre.
In July, USDA projected a corn harvest of 13.875 billion bushels and an average yield of 166 bushels per acre. The August forecast is based largely on farmer surveys and satellite imagery, while earlier estimates came from statistical models.
USDA also boosted its 2019/20 corn ending stocks view due to the increased harvest expectations, bumping it to 2.181 billion bushels from 2.010 billion bushels in July. It also lowered its export forecast for corn for the marketing year by 100 million bushels to 2.050 billion bushels due to rising competition from Argentina, Brazil and Ukraine.
The government's U.S. wheat production forecast of 1.980 billion bushels topped market expectations for 1.925 billion bushels and was above the July outlook of 1.921 billion bushels.
(Reporting by Mark Weinraub, Julie Ingwersen and PJ Huffstutter Editing by Chizu Nomiyama and Tom Brown)