Corn and soybeans sitting firm ahead of USDA report

CNS Canada – Corn and soybean markets at the Chicago Board of Trade have been strengthening ahead of Friday’s World Agricultural Supply and Demand Estimates report from the United States Department of Agriculture.

“There’s been a lot of really big yield estimates we’ve been throwing around that people are starting to walk back a little bit…and that’s I think helped to firm up the market,” said Jack Scoville of Price Futures Group in Chicago, Ill.

According to Scoville, traders are expecting U.S. corn production to be at 14.417 billion bushels and for soybeans to be at 4.428 billion bushels. That would be higher than July’s report where corn was at 14.230 billion bushels and soybeans were at 4.310 billion bushels. Estimates for yields are at 176 bushels per acre for corn and 49.8 bushels per acre for soybeans, compared to last month at 174 bushels per acre for corn and 48.5 bushels per acre for soybeans.

Weather in the U.S. Midwest hasn’t been flaky, which is leading traders to expect that there won’t be any record yields this year, according to Scoville.

Export demand has also been good which has been supportive for the market. Export inspections for corn last week were better than traders expected with 1.288 million tonnes being exported. Soybeans haven’t been doing as well due to the ongoing trade war between the U.S. and China but Scoville said there is still good export demand from the rest of the world.

“Even in the beans, not necessarily with the Chinese, but everybody else in the world thinks we’re damn cheap compared to Brazil,” he said.

The trade war isn’t affecting the soybean and corn market as much anymore as traders already have it priced into the market and they aren’t expecting the situation to change anytime soon, according to Scoville.

The dry weather in Europe and the Black Sea region has also been affecting the U.S. commodity markets, especially the wheat markets with contracts rising dramatically in the last few weeks. According to Scoville it has also been a factor in the corn market.

“We know that if it’s affecting the wheat, it’s probably affecting the feed grains as well. And that’s been a factor here (for corn),” he said.