U.S. corn and soybean prices fell this week after federal forecasters reported large increases in domestic stockpiles of the crops. Corn futures dropped after USDA pegged U.S. inventories on September 1 at 1.731 billion bushels, up from 1.232 billion a year earlier.
Both U.S. corn and soybean supplies increased after farmers harvested record crops last year, collecting 14.2 billion bushels of corn and 3.93 billion bushels of soybeans. Largely favorable weather again graced the Midwest this year, raising expectations that growers will harvest another round of bumper crops. That has prompted concern among some traders and industry watchers that domestic stockpiles could outstrip demand for the crops.
U.S. soybean prices also dropped. Though federal forecasters reported smaller-than-expected stockpiles of the oilseeds, reserves were up sharply from last year.Soybean reserves on September 1 totaled 191 million bushels, more than double the 92 million bushels last year. The lower-than-expected projection for soybean supplies stems largely from the USDA’s move to revise downward its estimate of last year’s harvest. It pegged 2014 production at 3.93 billion bushels, down 41.7 million bushels from its earlier estimate of 3.97 billion.
Demand for U.S. soybeans could become a bigger concern as the nation’s harvest progresses, analysts said. The strong dollar is spurring worries that global purchases of U.S. soybeans or soymeal, primarily for animal feed, will taper off just as supplies bulge.