The U.S. Department of Agriculture raised its yield projections for corn and soybean to record levels on Friday.
Corn comes in at 178.4 bushels an acre, up four bushels from the last report. Soybeans were also a record 51.6 bushels an acre, which is three bushels higher.
The USDA’s new crop ending stocks estimates for soybeans is 784-million bushels, exceeding pre-report expectations by more than 200 million bushels. This could provide additional pressure on the Trump Administration to find a resolution to the trade war with China. The Chinese have a 25 percent import tariff on U.S. soybeans.
The September soybean futures contract in Chicago plunged 42 cents to just under $8.51 a bushel following the USDA report. Corn fell 11-and-a-half cents to just over $3.57 a bushel.
Canola hung in fairly well, in spite of the large drop in soybean prices. The November canola futures contract closed $3.80 lower to $504.90 a metric tonne. Mitigating factors were a half cent drop in the Canadian dollar on Friday and the heat wave over Western Canada this week.
Ken Ball with PI Financial says the market is still trying to assess the impact of the extreme heat on canola yields.
“There is a nervousness about the impact of the hot weather we are getting for the last few days,” says Ken Ball with PI Financial. “It’s certainly not going to help the crop, but it’s hard to tell exactly how much damage will be done.”
The USDA only made a small downward adjustment on its global wheat estimate, in spite of dry conditions over much of Europe and Australia. Ball expects to see those numbers adjusted in future reports.