Surprising projections and estimates from the U.S. Department of Agriculture (USDA) last week are weighing on commodity markets this week.

Prices for corn and soybeans suffered after USDA yield estimates came in significantly higher than expected, Dr. John Newton, director of Market Intelligence at American Farm Bureau Federation, reports in Newsline.

“You really saw prices tumble following the report. Where USDA is getting this information is leaning on the crop condition information as much as they are some of their surveys,” Newton said.

Projected soybean yield in the crop production report was also surprising.

“Last year, the record crop was due to very exceptional soybean yields, and this year, the record crop’s really driven by an expansion in planted area. But certainly, that yield number coming in where it did led to another record crop to be expected for soybeans,” Newton said. “That’s really pushed prices lower in the face of a record crop last year and a record crop that came online in South America, another bumper harvest of soybeans in the United States. And in order to move that product, it’s going to move at a lower price.”

Combine the record number of acres American farmers planted with soybeans this year with the prediction of high yields, and there could be a record crop, Newton said.

At the end of the day, the numbers released in the report are just projections, Newton said. Late corn is still maturing and USDA could make adjustments in yield projections and planted acres.

“While I expect the crop size to get a little bit smaller, I don’t think it’s going to get substantially smaller just because conditions are close to where they were on average,” Newton said. “I think crop yields come in around trend and a cut to harvested area should work to pull down, especially on the corn side, the ending stocks next year. There’s a lot of uncertainty in the market. Any potential reductions in that crop size could provide an opportunity to lock in some more favorable prices for that new crop corn and soybeans.”

Texas farmers are forecast to produce 5.25 million bushels this year. That’s 755,000 fewer bushels than last year. USDA’s National Agricultural Statistics Service (NASS) predicts yields up four bushels to 35 bushels an acre this year.

American production is forecast at 4.381 billion bushels grown on 88.7 million acres, which would be a record if realized.

U.S. production is forecast up 121 million bushels, which is a two percent increase over last year.