This year’s expected all class US wheat yield (43.6 bushels per acre) is just 16% more than in 1985, while that for corn is up 42%; soybeans, 38%; long-grain rice, 43%, upland cotton, 24%, and sugar beets, 48%. Higher corn and soybean prices over the next two months generated by lower USA production estimates, an improvement in export prospects, or other positive development, cannot be ruled out. “In addition, individual yield reports over a large area this year suggest there may be more potential for increases rather than decreases in the yield forecasts”.

Soybean production is forecast at a record 3.98 billion bushels, up 2 percent from October and up 1 percent from a year ago.

Analysts said in the aftermath of the USDA report, traders’ attention now would turn to weather in South America, where farmers are raising their next crops. The Chinese corn carryout is now the largest the country has experienced since the 1999/2000 crop year.

Increases to sorghum production far outpaced what analysts expected. Remember that our benchmark for carryout is that we need to get below 1 billion to be considered “tight”.

“The USDA now actually envisages a slight increase year-on-year (in US ending stocks) rather than a decline”.

Globally, USDA forecast ending stocks at 82.9 mmt, down its October forecast of 85.1 mmt. “Unless the export environment changes as a result of a weakening in the value of the USA dollar or production problems in the southern hemisphere, it appears that exports will struggle to reach the current USDA projections”. Werling says ending stocks were also raised, but were offset somewhat by strong demand figures.

Corn, beans, and wheat are all lower by 1.5-2% following the report.

The report prompted an observation by the editors at Farm Futures, a sister publication to Delta Farm Press: “These are big crops the world doesn’t want”, a tweet by Farm Futures said. Ending stocks are now estimated at 911 mb, which is near the high end of pre-report estimates. China corn beginning stocks are raised 18.8 million tons for 2015/16 reflecting the impact of lower estimated feed use for the preceding marketing years.

However, Morgan Stanley said, “we maintain that export weakness is a near-term problem for corn“, with sales poised “to accelerate in the medium term to meet global import needs”.

The USDA corn yield number was above the average trade forecast of 168 bushels an acre, and the soybean yield number was above the trade average estimate of 47.5 bushels an acre.