In a recent update, the U.S. Department of Agriculture (USDA) has predicted a record-breaking corn harvest for the 2023-24 season, which has led to a considerable decline in futures prices to the lowest in three years.
According to the USDA's report, the corn crop is estimated to be 15.234 billion bushels, an increase from the 15.064 billion predicted in October. This record production is expected to lower the prices of corn, widely used in animal feed and biofuels, which, in turn, could compress farmers' profits. Many farmers might choose to store their corn, anticipating an increase in demand from exports or other domestic uses.
The USDA has also revised its soybean production forecast to 4.129 billion bushels, a slight increase from its previous estimate. The average yield per acre is calculated at 174.9 for corn and 49.9 for soybeans. These adjustments come in light of recent reports indicating stronger corn yields in the Midwest, which contrast with the government's previous reduction in corn and soybean harvest forecasts.
Following the announcement, the Chicago Board of Trade saw corn futures fall significantly, reflecting the lowest prices since December 2020. Soybean futures also experienced a decrease.
Analysts had initially expected a lower corn harvest with an average yield, making the USDA's updated figures notably higher. This surge in corn production is anticipated to lead to increased grain stocks once the corn is distributed to customers and exporters.
The projection for corn stocks for 2023-24 is now at 2.156 billion bushels, higher than the earlier estimate of 2.111 billion. Likewise, global corn stocks are expected to rise.
Additionally, U.S. soybean ending stocks are projected to increase to 245 million bushels from the previous estimate of 220 million. These developments highlight the complexities and variables influencing the agricultural market, including environmental conditions, global demand, and technological advancements in farming practices.
Source : wisconsinagconnection