As expected, USDA on Wednesday trimmed it forecasted U.S. corn harvest slightly to 15.06 billion bushels and raised the soybeans to 4.27 billion. The corn number was close to trade forecasts, while the soybeans were a little less than what traders expected.

Both numbers would be record large if realized as will the expected average yields of 173.4 bushels per acre for corn and 51.4 for soybeans.

Ending stocks were lowered for corn to 2.32 billion bushels and raised for soybeans to 395 million. Both of those numbers were under average trade forecasts.

Corn yield and production could set U.S. record. (Photo: branex/Thinkstock)

“USDA provided few major surprises in today’s reports, with corn and soybean production estimates well within trade expectations,” said Bryce Knorr, Farm Futures senior grain analyst. “So in one sense the reports take away one of the trade’s biggest fears, namely that the crops might be much better than previous estimates. With the slow pace of harvest those fears could linger, but I expect the market to turn its focus to proving USDA is right about demand.”

In the Chicago markets, soybeans traded about a penny higher after the report after being lower earlier. Corn futures were trading about 3 cents lower near midday, after about a penny higher prior to the numbers. Wheat futures had little reaction to USDA’s numbers and were about a penny higher in the three markets near midday.

As expected, USDA raised corn and soybean exports to 2.225 billion bushels and 2.025 billion, respectively from September's 2.175 billion and 1.985 billion. For soybeans, the larger crop and increased imports offset the larger exports and resulted in the increase in ending stocks.

“USDA acknowledged the good demand for corn I’ve worked into my supply and demand tables, and also showed stronger soybean export potential reflected in the pace of early sales. Today’s soybean sale to China reported by USDA is a start, though the fact that almost half of the deal was listed as optional origin is a reminder that the U.S. selling season won’t last indefinitely unless South American production is curtailed.”

U.S. wheat ending stocks were raised 1.138 billion bushels, which was less than the trade forecast of 1.153 billion.

“Not much was expected in this report for wheat, but USDA’s carryout estimate showed a little smaller increase than anticipated. But until world production takes a hit, spread trading and short covering is about the best we can hope for,” said Knorr.

In other countries, USDA raised corn and soybean production in Brazil to 102 million metric tons and 83.5 million, respectively, from September’s 101 million and 82.5 million. Argentina’s corn and soybeans stayed at 36.5 million and 57 million.