Source:  Rita Jane Gabbett, MEATINGPLACE.COM, 8/12/10

USDA forecast record corn and soybean crops, but crop shortfalls overseas will increase use, resulting in the lowest corn ending stocks in four years by September 2011 and pushing corn and soybean prices higher.   

USDA forecast the 2010 U.S. corn crop at a record 13.4 billion bushels and the soybean crop at a record 3.43 billion bushels, beating the average trade forecasts of 13.28 billion bushels of corn and 3.37 billion bushels of soybeans.

Despite the bin-busting estimates, USDA also raised its average price forecasts for corn and soybean, reflecting strong global demand for both commodities as lower foreign production is expected to more than offset higher U.S. output.

USDA forecast average corn prices for the 2010/11 marketing year beginning in September at $3.50 to $4.10 per bushel, up from five cents on each end of the range from a month ago.

USDA boosted average U.S. soybean prices for the same period in a range of $8.50 to $10.00 per bushel, a 40-cent increase on each end of the range. It pegged average soybean meal prices at $250 to $290 per ton, up $10 per ton on each end of the range.

The forecasts, outlined in USDA’s crop production report, were the first estimates of the year based on actual field surveys of crop conditions on Aug. 1.

In its World Agriculture Supply and Demand Estimates report, USDA raised its estimates of domestic corn use based on higher use sweeteners and starch and raised its corn export forecast based on lower foreign feed stock production. A drought in Russia is dramatically reducing the wheat crop there.

Consequently, USDA lowered its forecast for corn ending stocks in September, 2011 to 1.3 billion bushels – the lowest in four years.

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