A rolling sea of green stretches across the horizon on Daryl Obermeyer's farm in eastern Nemaha County.

The corn looks exceptional, and Mother Nature just gave the fields a good dousing, a boon for thirsty soybeans. Even in cornfields that got ravaged by hail this spring, Obermeyer expects an average yield.

And he's not alone.

Helped along by favorable weather this summer, Nebraska and the nation look to be headed for record-setting corn and soybean production this year, according to U.S. Department of Agriculture forecasters.

Based on conditions as of Aug. 1, Nebraska farmers are expected to harvest 1.76 billion bushels of corn, up 4 percent from last year, with an average yield of 187 bushels per acre, two more bushels than in 2015, according to the USDA’s National Agricultural Statistics Service.

In soybeans, Nebraska is forecast to produce 310 million bushels, up 1 percent over last year despite farmers harvesting 5.25 million acres, slightly fewer than last year. Soybean yield is expected to be a record high of 59 bushels per acre, one more than in 2015.

Nationally, producers are expected to reap a record 15.2 billion bushels of corn this year, up 11 percent from last year, and 4.06 bushels of soybeans, up 3 percent.

Nearly all Corn Belt states, with the exceptions of Minnesota and South Dakota, likely will have corn yields greater than last year.

National average corn yield is forecast at 175.1 bushels, while soybeans are expected to be 48.9 bushels an acre.

Issued Friday, the crop production forecasts came in higher than most analysts and producers had expected, said Boone McAfee, the Nebraska Corn Board’s director of research. Despite that, commodity markets barely shrugged.

“Sometimes after these reports you can have really drastic drops,” McAfee said. “We didn’t see that today.”

On the Chicago Board of Trade, corn for September delivery closed up a penny on Friday, ending at $3.22 a bushel, August soybeans lost 19 cents going to $10.33 a bushel, and wheat for September was up 6 cents to $4.23 a bushel.

McAfee speculated that traders had already expected to see a substantial crop report, which muted reaction.

Darin Newsom, an analyst with the DTN agricultural news network in Omaha, noted that demand for U.S. crops has strengthened as noted in the USDA’s World Agriculture Supply and Demand Estimates Report, also released Friday.

Supplies of corn from Brazil are expected to be tight, the worth of the U.S. dollar has seen some downward pressure and the cheap price of American corn is making it attractive on the world market, Newsom said.

Obermeyer, who has been farming since 1974, said it demonstrates an old piece of agricultural wisdom.

“There is an old saying: The best cure for low prices is low prices," he said.

"Because when the prices get low, demand builds. Everything is cyclical. If we get a surplus, we work out of it by increasing demand. When supplies are short, prices go up, but then we lose customers because of the price.”

Farmers have been struggling to make ends meet in the face of persistently low commodity prices.

Farm sector profits this year are expected to be down for the third year in a row. The USDA projects ag income will be $54.8 billion in 2016. That’s 3 percent lower than last year and would be the lowest since 2002.

Federal Reserve Bank of Kansas City recently reported low agricultural income is weighing on farmland values and leading some producers to struggle with repaying their loans. In the second quarter of 2016, more than 7 percent of farm loans had major or severe repayment problems compared with an average of 3 percent for the 2011-13 time period within the Federal Reserve’s Tenth District.

Reach the writer at 402-473-7304 or nbergin@journalstar.com.

 On Twitter @ljsbergin.

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