A new report from the U.S. Department of Agriculture Department July 11 has put downward pressure on corn and soybean prices.
The report on World Agricultural Supply and Demand (WASDE) predicted an increase in ending stocks of corn and soybeans by September.
It also predicted a good to great yield of both crops in the United States this season. Soybean prices dropped dramatically in the wake of the Friday report.
The USDA predicted the ending stocks of corn — the amount left over after all livestock are fed and ethanol is made — would stand at 1.8 billion bushels by the end of the marketing year.
The prediction is partially based on 83.3 million acres of corn that was planted this year and an estimated record U.S. corn yield of 165.3 bushels per acre.
Though there are parts of Wisconsin where corn crops don't look great, state travelers to corn country of Iowa and Illinois report that corn fields there look tremendous.
The report increased the corn ending stocks to 1.8 billion bushels because of lowered use for livestock feed.
The 2014 corn crop is expected to come in at 13.86 billion bushels, slightly less than the prior year, based on projected yield per acre.
Strong demand from foreign markets coupled with continued steady use for feed and ethanol production is expected to consume about 13.34 billion bushels by the end of the 2014-15 marketing year.
"Provided moderate temperatures and moisture prevail, growers should bring in a good corn crop," said John Anderson, deputy chief economist with the American Farm Bureau Federation.
"Any late-planted corn and soybeans will need the advantage of temperate weather conditions as the growing season continues and we look toward fall with its ever-present possibility of an early frost," he said.
In light of the information in its report, USDA projected corn prices for the 2014-15 marketing year at $3.65-$4.35 or $4 a bushel and noted that that number could drop even more if national yields increase more than the given prediction.
In 2012-13 corn ending stocks stood at only 821 million bushels and the price averaged $6.89.
The report predicted an average of $4.45 for the 2013-14 marketing year based on the ending stocks of 1.25 billion bushels.
Record production of soybeans was predicted for the nation's soybean growers in that report as well. The USDA predicted 3.8 billion bushels of production based on record yield of 45.2 bushels per acre across the country.
Ending stocks for old-crop soybeans were increased in the report to a projected 415 million bushels. If realized, this would be the highest level of soybean carryover since the 2006-2007 marketing year.
Prices for soybeans dropped in the wake of the report.
On June 1 soybean stocks were at their lowest level in many years and that buoyed prices, but with the USDA's projected yield and record soybean acreage, old-crop prices have been eroded.
"Globally, the estimate for soybeans supplies also increased, due to larger U.S. production as well as larger projected crops in Russia and Ukraine," said Anderson.
The USDA is now estimating soybean ending stocks at 415 million bushels and an average price of $10.50 per bushel for U.S. soybeans by the end of the 2014-15 marketing year. That would be among the highest ending stock for soybeans ever.
The report predicted an average price of $13 per bushel for the 2013-14 marketing year. It was $14.40 per bushel at the end of the 2012-13 marketing year.