Despite smaller plantings, U.S. farmers will harvest the second-largest soybean crop and third-largest corn crops this fall, the Agriculture Department projected, with high demand whittling down the corn stockpile by 8 percent but soybean ending stocks ballooning to the largest size in nine years.
The corn crop was projected for 13.595 billion bushels, down 4 percent from last's record, soybeans for 3.800 billion bushels, also down 4 percent from 2014's record, and wheat for 2.125 billion bushels, up 5 percent from last year on better yields. After setting records last year, corn and soybean yields are expected to return to normal levels.
On the final day of its Outlook Forum, USDA said season-average prices for this year's corn, soybean and wheat crops would run well below the prices fetched by the 2014 crops. It projected farm-gate prices of $3.50 for corn, $9 for soybeans and $5.10 for wheat. The corn price would be 15 cents a bushel lower than this marketing year, soybeans $1.20 lower and wheat 90 cents lower.
Record-large corn consumption of 13.760 billion bushels, including larger exports and feed use, will reduce supplies swollen by back-to-back record crops in 2013 and 2014. By the time the 2016 crop is ready for harvest, the corn stockpile will be 8 percent smaller than when this year's harvest begins.
USDA said corn-for-ethanol, at 5.225 billion bushels, would be slightly smaller during the 2015/16 marketing year than in the current year. The Energy Department forecasts a modest downturn in gasoline demand due to rising prices and improved fuel economy for U.S. cars and trucks.
The second mammoth soybean crop in two years will out-run the needs of exporters, processors and livestock feeders, adding more soybeans to a stockpile that already is the largest in eight years, said USDA.
Soybean ending stocks for 2015/16 are pegged for 430 million bushels, up by 45 million bushels from the 385 million bushels expected in storage at the end of this summer, despite a 2 percent increase in consumption from 2014/15. It would be an astonishing turn-around from bare-bones stocks of 92 million bushels on Sept 1, 2014.
A record 1.82 billion bushels will be exported from this year's soybean crop, "a modest rise" from this marketing year, said USDA. "However, limited growth in global trade and record 2015 South American production will add to competitive pressures facing U.S. exporters in the coming year." China, which buys two-thirds of the soybeans on the export market, is expected to moderate its purchases from the 11 percent annual growth rate of the past decade.
Corn plantings are projected to fall for the third year in a row, to 89 million acres this year, down by 1.6 million acres from 2014. Wheat plantings would drop by 1.3 million acres, to 55.5 million acres. Soybean growers will plant 83.5 million acre, slightly less than last year's record 83.7 million acres.
"Soybeans remain a favorable alternative to higher cost crops like cotton and corn for many producers, especially those in lower-yielding corn areas," said USDA.
Although growers will plant less wheat, production will rise due to better conditions in the central and southern Plains, hit by severe drought last year, said USDA. "Drought remains a concern in the Great Plains, it said, but condition ratings for hard red winter wheat in the Plains are 13 points higher than a year ago. Wheat exports are forecast for 975 million bushels for 2015/16, up 75 million bushels from the current marketing year and feed use also would rise. Still, ending stocks would rise by 10 percent, to 763 million bushels, in 2015/16, the largest inventory in six years.
"Wheat prices are expected to remain under substantial pressure from large world supplies of wheat and corn," said USDA.
