Record Corn, Soy, Cotton Crops Will Mean Lower Prices

Ideal fall weather in the Midwest boosted the U.S. corn crop to a record 11.613 billion bushels and soybeans to a record 3.11 billion bushels while cotton will hit a record 21.545 million bales despite hurricane damage in the Southeast, the government forecast Tuesday.

The Agriculture Department (search) also said orange production would plummet by 27 percent from last season in Florida, hit by four hurricanes in August and September, to 176 million boxes weighing 90 pounds each.

"This will clearly devastate the corn market," private consultant John Schnittker said of the forecasts. He foresaw "steady to weak" corn, wheat and soybean prices well into the winter, when Australia, Brazil and Argentina harvest crops.

At the trend-setting Chicago Board of Trade (search), analysts said corn futures prices (search) would fall by 7-10 cents a bushel Tuesday and soybeans by 20 cents due to the mammoth crops forecast. Wheat would dip by 2-4 cents, they said. Cotton futures were expected to plunge in New York as well.

USDA said the huge crops would mean a doubling in the soybean stockpile, to 405 million bushels, while the corn stockpile would rise by one-third, to 1.69 billion bushels.

Balmy September weather warded off the risk of an early yield-cutting frost and swelled the fall harvest astonishingly. USDA raised its corn estimate by 6 percent, soybeans by 10 percent and cotton by 3 percent. Record yields were estimated — corn at 158.4 bushels an acre, soybeans 42.0 bushels an acre and cotton 782 pounds per acre.

"Weather conditions have been mostly favorable throughout the growing season," USDA said.

Cotton output in Georgia and Alabama was cut by 350,000 bales by hurricanes in September, USDA said, but the overall U.S. crop still expanded by 600,000 bales. A bale of cotton weighs 480 lbs.

The record U.S. corn crop was 10.1 billion bushels, harvested last year, with a record yield of 142.2 bushels an acre. For soybeans, the record crop was 2.89 billion bushels in 2001. The largest cotton crop on record was 20.3 million bales in 2001.