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U.S. grains: Corn, soy at multiweek highs on positioning ahead of USDA

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Chicago | Reuters — U.S. corn and soybean futures finished narrowly higher on Friday, capping big weekly gains in a choppy session of light-volume trading ahead of the U.S. Department of Agriculture’s monthly supply and demand report next week.

Chicago Board of Trade corn futures hit a 2-1/2-week high and soybeans finished at the highest levels in two weeks while wheat futures declined for the first time in three sessions.

USDA is likely to reduce its corn yield forecast and raise its soybean yield forecast in its September supply and demand outlook due at midday on Monday, according to a Reuters poll of analysts.

Analysts estimated the corn yield at 173.4 bushels per acre, down from 175.1 bu./ac. on Aug. 12, but still a record high and the average soybean yield 49.2 bu./ac., up from 48.9 in August.

Bumper harvests could exacerbate supply pressure given large grain stocks, partly due to the reluctance of farmers to sell at low prices, analysts said.

“Time is now running out for them (farmers), so they may find themselves forced to sell their stocks to make space for the new crop. This would add to the pressure on prices,” Commerzbank analysts said in a note.

Chicago Board of Trade corn futures gained 3.5 per cent this week, their largest such bounce since June after prices hit a seven-year low last week. CBOT December corn on Friday settled up 2-1/2 cents at $3.41 per bushel (all figures US$).

“We had some guys doing some short-covering,” Highground Trading broker Scott Capinegro said, adding that he was bearish on corn prices and predicted December corn could fall as low as $3.01.

“If (Monday’s data) is neutral, we should be lower. It’s going to be a big crop,” Capinegro said.

U.S. Commodity Futures Trading Commission data released after the close of trading suggested that speculative investors also were bearish, with speculators expanding their net short corn bet in corn to the largest in more than four months.

Speculators in the trading week ended on Sept. 6 also extended their wheat net short and trimmed their net soybean long position, CFTC data showed.

CBOT November soybeans settled 3-1/2 cents higher at $9.80-1/4 per bushel, adding to a weekly gain of 2.7 per cent.

CBOT December wheat was down 2-1/2 cents to $4.03-1/2 per bushel but still managed a weekly gain of 0.8 per cent.

Michael Hirtzer reports on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.

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