The U.S. Government Cuts Harvest View for Corn, Soy; Trims Wheat Supplies

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Author: Kelly Carter

The United States Department of Agriculture announced on Wednesday that the U.S. corn and soybean harvest would be lower than expected, raising feats of lack of supply, especially when global food inventories are moving toward their lowest levels in a decade.

As supplies from the second-smallest harvest in the previous 20 years run out, the government likewise lowers its forecast for the domestic reserve of wheat to its lowest level in 15 years.

The expectations for the maize and soy harvests, as well as the potential necessity for the government to reduce wheat supplies, will be discussed on this article.

Experts project elevated prices.

Given the limited supply, consumers and investors can anticipate higher prices, according to Craig Turner, a grain broker with StoneX.

Following the projection, Soybean Futures, trading nearly steadily, rose 2.7% to their highest level since September 30, as traders had already factored in expectations for a little increase in production. Due to the cuts being in line with expectations, corn and wheat prices continued to decline.

Is Dry Weather the Reason for Small-Scale Harvests?

The harvesting potential from the United States to China and France has been reduced by dry weather. Also, the global supply base has become more restricted due to the interruptions to shipments from war-torn Ukraine, increasing the risk of famine in developing nations.

According to the U.S. Agriculture Department’s monthly Crop Production Report, corn production was estimated at 13 billion bushels, based on an average yield of 172 bushels per acre. With an average yield of 50, the soybean harvest was estimated at 4.3 billion pounds.

The USDA predicted that corn production would reach 13.9 billion bushels and soybean production would reach 4.4 billion bushels a month prior.

At the same time, the Department calculated that the crops produced 172.5 and 50.5 pounds of yield, respectively. Analysts had anticipated that the October figures would reveal yields of 171 and 50.6 for soybeans and 13.8 billion bushels for maize, respectively.

Wheat and corn stocks for 2022

According to the United States Department of Agriculture (USDA), closing wheat stock for the marketing year 2022–2023 would be 570 million bushels, a 13.9% decrease from the previous year and the lowest since 306 million bushels in the 2007–2008 marketing year.

On the other hand, closing corn stocks were estimated at 1.2 billion bushels, a reduction of 47 million bushels from the forecast for September. If achieved, that would mark its lowest level in ten years.

The closing stocks of soybeans didn’t change much and remained at 200 million bushels, still at a seven-year low. However, the anticipated export volume was reduced by 40 million bushels.

Bottom Line

Due to the dry weather and the unrest in Ukraine, corn, soybeans, and wheat supplies are at an all-time low this year. Experts warn consumers and investors to brace themselves for a surge in crop prices for the rest of the year. Due to a production shortfall, the government plans to reduce wheat supplies in October. Before investing heavily in these crops, investors may want to keep an eye on market prices.

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