U.S. Soybean Crop Seen Smaller as Midwest Drought Reduces Yields

Soybean output in the U.S., the world’s biggest producer, will be smaller than the government forecast last month after hot, dry Midwest weather eroded yield potential.

Farmers will harvest 3.149 billion bushels this year, compared with 3.255 billion (88.6 million metric tons) estimated in August and last year’s drought-damaged crop of 3.015 billion, the U.S. Department of Agriculture said today in a report. Analysts surveyed by Bloomberg News expected 3.134 billion.

Yields were forecast at 41.2 bushels an acre, in line with analyst expectations. Last month, the government predicted 42.6 bushels, up from 39.6 a year earlier. Harvested acreage was forecast at 76.4 million acres, unchanged from last month and up from 76.1 million in 2012, the agency said.

Temperatures averaged as much as 8 degrees Fahrenheit above normal in the 30 days ended Sept. 8 in parts of the Midwest, according to data from the High Plains Regional Climate Center. Some fields from North Dakota to Ohio received less than 25 percent of normal rain during the period. Moderate to extreme drought conditions expanded to 29 percent of nine Midwest states as of Sept. 3, up from 3.5 percent three months earlier, government data show.

U.S. reserves on Aug. 31, 2014, before next year’s harvest, will total 150 million bushels, up from 125 million a year earlier, the agency said. The average estimate of 34 analysts surveyed by Bloomberg was 165 million bushels.

Global output in the crop year that begins Oct. 1 will be 281.66 million metric tons, compared with 281.72 million forecast last month, the USDA said. Worldwide inventories before the start of the 2014 Northern Hemisphere harvest will be 71.54 million tons, down from 72.27 million predicted in August, the USDA said. Traders expected reserves to fall to 71.1 million, on average.

Through yesterday, soybean futures on the Chicago Board of Trade tumbled 20 percent in the past year to $13.5825 a bushel.

The USDA raised its average farm gate price in the marketing year that began Sept. 1 to $12.50 a bushel from $11.35 a bushel forecast in August.

Before it's here, it's on the Bloomberg Terminal.