U.S. government cuts corn, soy supply view on harvest setbacks

U.S. corn and soybean supplies will fall to multi-year lows as hot and dry weather during August in western growing areas cut into the harvest potential for both crops, the government said on Monday.

The U.S. Agriculture Department cut its outlook for U.S. corn end stocks in the 2022/23 to a 10-year-low of 1.219 billion bushels, from 1.388 billion. Soybean supplies were seen at a seven-year low, of 200 million bushels.

Chicago Board of Trade soybean futures surged after the report was released, with the most-active contract up 4.2% and on pace for its biggest daily gain in 2-1/2 months. Corn futures rallied to their highest since June 28.

“The bean yield came in well below the low-end of expectation” and that, along with USDA’s drop in harvested soybean acres, is what is giving soy futures its strength today, said Ted Seifried, vice president of Zaner Group.

Soybean harvest was pegged at 4.378 billion bushels, with average yields seen at 50.5 bushels per acre.

Analysts had been expecting a corn production figure of 14.088 billion bushels, based on a yield of 172.5, according to the average of estimates in a Reuters poll of analysts. Average trade forecasts for soybean production and yield were 4.496 billion bushels and 51.5, respectively.

Tags: corn, export, soybean, USA