May 14, 2005

USDA forecasts second-largest corn and soy crops in eighteen years

US farmers will harvest their second-largest corn and soybean crops this fall, helping to push the corn surplus to its highest level in 18 years. The Agriculture Department said the farm-gate price for corn will drop to US$1.75 a bushel for this year's crop, the lowest average price since the 1987 crop.

US soybean production will however fall by about 8 percent from last year but strong demand from China, will keep export volume high.

In its first look at this year's US crops, the USDA projected a corn harvest of 10.985 billion bushels, soybeans at 2.895 billion bushels and wheat at 2.185 billion bushels, including a forecast 1.59 billion bushels of winter wheat.

Kansas, the no. 1 winter wheat state, was forecast to reap 422.4 million bushels, a dramatic rebound from last year's drought-cut 314.5 million bushels. No. 2 Texas and no. 3 Oklahoma would be down slightly.

Despite larger exports and more use of corn to make ethanol, the U.S. corn stockpile will be 2.540 billion bushels at the end of the 2005/06 marketing year, the largest since 1987/88.

Soybean exports from this year's crop were at a record 1.125 billion bushels. Corn, soybeans and cotton all set records last year -- 11.8 billion bushels of corn, 3.141 billion bushels of soybeans and 23.24 million bales of cotton. The previous records were 10.089 billion bushels of corn in 2003, 2.891 billion bushels of soybeans in 2001 and 20.3 million bales of cotton in 2001.