CHICAGO, July 12 (Reuters) -
The government said on Wednesday that U.S. farmers will harvest massive crops of both corn and soybeans this year, boosting the supply base despite drought conditions stressing plants during early stages of development.
The unexpectedly large forecasts immediately pushed down corn and soy futures, potentially easing inflation and making U.S. exports more competitive with South America in coming months.
The corn harvest was pegged at a record large 15.320 billion bushels and soybean harvest at 4.300 billion bushels, according to the U.S. Agriculture Department's monthly World Agriculture Supply and Demand Estimates report.
USDA predicted record yields for both crops, with corn seen at an average of 177.5 bushels per acre and soybeans at 52.0 bushels per acre.
"The government is saying that (the U.S. Midwest drought) hasn't hurt the beans much," said Don Roose, president of U.S. Commodities. "The corn, they acknowledge that we've hurt it some but we've got crop-saving rains so we've stabilized it."
The harvest forecasts topped
market expectations
and sent Chicago Board of Trade corn futures to their lowest in 2-1/2 years. Soybean futures dropped sharply after trading higher throughout the morning.
High prices have curtailed overseas demand for both corn and soybeans, with overseas buyers gobbling up cheaper supplies from Brazil due to the massive harvest from that key South American producer.
USDA slashed its outlook for U.S. soybean exports in the 2023/24 marketing year to 1.850 billion bushels from 1.975 billion.
That will lead to an ending stockpile of 300 million bushels of soybeans, up 45 million bushels from 2022/23 and above the high end of market expectations.
USDA pegged corn ending stocks for 2023/24 at 2.262 billion bushels, 5 million bushels higher than its June outlook.
If realized, that would be the largest U.S. corn stockpile since the 2016/17 marketing year, when supplies were reported at 2.293 billion bushels. (Additional reporting by Karl Plume; Editikng by Chizu Nomiyama)
