Traders Drive Prices Higher Despite Record Yield Forecasts

On Wednesday, the United States Department of Agriculture (USDA) released its monthly World Agricultural Supply and Demand Estimates (WASDE) and Crop Production reports. The reports contained the first survey-based estimates for U.S. corn and soybean production, but unlike prior years, they did not provide objective yield data gathered from USDA’s test plots.

USDA projected the 2020/21 U.S. corn yield at a record of 181.8 bushels per acre, which was above analysts’ expectations that ranged from 177.5 to 183.3 bushels and averaged 180.5 bushels. USDA’s forecast 2020/21 U.S. soybean yield of 53.3 bushels per acre, was also a record and well above analysts’ expectations that ranged from 49.8 to 53 bushels and averaged 51.2 bushels.

Despite the larger-than-expected increases in U.S. crop production, both markets rallied following the release of…