Big Crops Yield Low Prices

On Wednesday, the U.S. Department of Agriculture announced its updated estimate of this year’s corn and soybean crops, projecting larger harvests of both commodities.

The USDA is now projecting record-high corn and soybean yields of 181.3 and 52.8 bushels per acre, respectively. If those figures hold, U.S. farmers will be harvesting the second-largest corn crop and the largest soybean crop in history, nearly 10% higher than last year’s harvest.

This news sent both markets to new low levels, with December corn futures breaking under $3.50 per bushel, and November soybeans nearing $8.20 in the aftermath of the report.

Farmers are still holding onto hope that the trade dispute with China will be resolved, bringing the world’s biggest soybean buyer back U.S. markets. Even if trade doesn’t come back this year, the farmers are still expecting to get a significant bailout check from the U.S. government for their soybeans in the form of trade support, but payments for corn will be negligible, leaving many producers trapped with a crop that could lose them money if they didn’t lock in higher prices earlier this year.