CHICAGO: US soybean futures closed higher on Tuesday after the US Department of Agriculture trimmed its forecast of US 2017-18 soybean ending stocks in a monthly report, bucking trade expectations for an increase.
Wheat closed modestly higher on technical buying and worries about poor weather in the US Plains wheat belt, while corn drifted lower.
Chicago Board of Trade May soybean futures settled up 3 cents at $10.50 a bushel after reaching $10.64, the contract’s highest in a month.
CBOT May wheat ended up 1-1/4 cents at $4.92 a bushel while May corn closed down 1-1/2 cents at $3.89-1/4 a bushel.
Soybeans climbed to session highs after the USDA trimmed its 2017-18 US soybean ending stocks forecast to 550 million bushels, down from 555 million last month and below an average of analyst estimates for 574 million.
The government raised its estimate of the US 2017-18 soybean crush, implying strong processor demand for soybeans and increased production of soymeal, while leaving its US soy export forecast unchanged.
“That might have been a mild surprise,” Allendale Inc chief strategist Rich Nelson said of the unchanged soybean export forecast.
“Given the drop for Argentina’s production, it’s relatively reasonable. They (USDA) are going to take a wait-and-see attitude until they see if we get extra sales from the lower Argentine crop,” Nelson said.
The USDA slashed its estimate of Argentina’s drought-hit soybean crop to 40 million tonnes, from 47 million in March, while raising its estimate of Brazil’s soy crop to 115 million tonnes, from 113 million last month.
CBOT soybeans got an early boost after the USDA through its daily reporting system said private exporters sold 120,000 tonnes of US new-crop soybeans to Argentina, marking the South American country’s largest purchase of US soybeans in 20 years.
CBOT wheat futures closed higher after a choppy session as traders returned their focus to poor weather in the southern US Plains winter wheat belt. The USDA late on Monday rated 30 percent of the US winter wheat crop in good to excellent condition, down from 32 percent a week earlier and 53 percent a year ago.
However, some traders said the firm close in CBOT wheat was mostly technical, noting that K.C. hard red winter wheat futures ended lower.
Source: Brecorder
