The Agriculture Department said Thursday that U.S. farmers will harvest a record corn crop and the second-biggest soybean crop ever this year.
The government predicted corn production of 10.923 billion bushels, up 8 percent from last year, and soybean production of 2.877 billion bushels, up 19 percent from last year’s drought-damaged crop but down from the 2.94 billion bushels it estimated last month.
In its first survey-based forecast for 2004, the department said a warm, dry planting season increased early development, and cool, wet weather in July benefited plant reproduction.
“This is an unprecedented year because weather has been very good for production,” said Randy Mittelstaedt, senior grain analyst for R.J. O’Brien. “Farmers understand that planting the crop early increases the yield potential.”
Large crops mean lower costs for big grain processors such as Archer Daniels Midland Co. and Bunge Ltd. Meat processors like Tyson Foods Inc. and Smithfield Foods Inc., which raise some of the livestock they slaughter, may see lower costs for grain-based feed.
The forecasts were released before the markets began regular trading. Soybeans for November delivery rose 30.5 cents, or 5.5 percent, to $5.8525 a bushel, on the Chicago Board of Trade .
Traders say the gain, the biggest since June 1, was because the USDA reduced its forecast from last month. Soybeans, used to make animal feed and cooking oil, still have fallen 45 percent since reaching a 15-year high of $10.64 a bushel on April 5.
Corn for December delivery fell 3 cents, or 1.3 percent, to $2.29 a bushel, on the CBOT, the lowest closing price for a most-active contract since Aug. 3. Futures have slid 34 percent from a seven-year high on April 8.
Some 76 percent of the corn crop was rated good or excellent as of Aug. 8, the best ratings for that time of year since 1994. The soybean crop was rated 73 percent good or excellent, also the best rating since 1994. The average rating for this period in the past 17 years is 62.2 percent.
Corn and soybeans are the biggest U.S. crops. Last year, the government valued corn at $24.8 billion and soybeans at $17.5 billion.
The outlook is not as good for wheat.
