USDA cuts estimates for corn, soybean harvests

The Agriculture Department has reduced its forecast for this year''s corn and soybean harvests due to drier weather, potentially leading to higher commodity prices, according to the Associated Press. U.S. corn production will be 12.1 billion bushels, down from its 12.3 billion estimate last month, the USDA said. The soybean crop is projected to be slightly lower, at 2.93 billion bushels, down from its earlier estimate of 2.97 billion. While the predicted corn crop will be 8 percent below last year''s, it would still be the second largest on record. The soybean crop would be 13 percent higher than last year''s and the fourth largest ever. That represents a major turnaround from earlier this summer, when some analysts feared the Midwestern floods in June had devastated the crops and would make already-expensive agricultural commodities even pricier. This month''s report is only the second of the USDA''s reports this year to include actual field visits and farmer surveys, which analysts consider more reliable. The reports are closely watched by companies that use corn and soybeans for livestock feed, such as Tyson Foods Inc., Pilgrims Pride Corp. and Smithfield Foods Inc. Higher commodity prices this year have cut the profits of chicken, beef and pork producers. The higher prices have also hurt corn-based ethanol manufacturers, such as Archer Daniels Midland Co.