Friday, 11 September 2015 04:10
CHICAGO: US grain and soybean futures edged higher on Thursday, with corn topping a one-week high, on expectations that the Agriculture Department will trim its domestic harvest estimates in highly anticipated reports due out on Friday.
Analysts expect the USDA, in the monthly reports, to cut its corn and soybean production and yield projections from August due to unfavorable weather, including hot and dry conditions in parts of the Midwest. Forecasts for U.S. ending stocks of each crop also are expected to decline.
Traders are concerned about the size of the crops because prices have tumbled over the past year due to massive harvests in 2014. Export demand for crops like soybeans and wheat also has been weak because of stiff competition from other countries.
“Traders are eagerly awaiting tomorrow’s USDA data dump,” said Kevin Van Trump, chief executive officer of Missouri consultancy Farm Direction.
At the Chicago Board of Trade, December corn advanced 5-1/4 cents, or 1.4 percent, to $ 3.74-1/4 a bushel. Earlier in the session, the contract rose to $ 3.74-3/4, its highest since Aug. 31.
November soybeans gained 1-3/4 cents, or 0.2 percent, to $ 8.74 a bushel. December wheat rose 5-3/4 cents, or 1.1 percent, to $ 4.78.
Traders were squaring up positions before the USDA reports as early harvest results have indicated that corn yields are coming in lower than expected. In parts of Illinois and Indiana, yields are down from last year’s record returns, they said.
“The trade seems to be sitting here and looking for a fairly sizable reduction in the yield” by the USDA, Van Trump said. “That means any type of ‘unchanged’ yield data will be viewed as bearish.”
The USDA will probably cut its U.S. corn production estimate to 13.599 billion bushels from its August estimate of 13.686 billion, with an average yield of 167.6 bushels per acre, down from 168.8 bushels, according to a Reuters poll of analysts.
The poll showed the agency cutting its U.S. soybean production estimate to 3.869 billion bushels from 3.916 billion and lowering its average yield estimate to 46.4 bushels per acre from 46.9 bushels.
The USDA crop reports are due at 11 a.m. CDT (1600 GMT) on Friday.
At 7:30 a.m. CDT, the agency is set to issue separate data on last week’s export sales of U.S. grains and soybeans.
