U.S. grains: Corn up on USDA world stocks view

Soybeans turn lower after touching six-week high

corn
(Dave Clark photo courtesy ARS/USDA)

Chicago | Reuters — U.S. corn futures rose about two per cent on Wednesday after the U.S. Department of Agriculture’s forecast for global inventories at the end of the 2017-18 marketing year fell below trade expectations.

Soybean futures hit a six-week high after the USDA’s reports were released, buoyed by the government’s forecast for a smaller-than-expected rise in domestic ending stocks for 2017-18. But the market turned lower as traders shifted their attention to rising global inventories.

Wheat ended modestly higher.

Chicago Board of Trade July corn settled up 7-1/4 cents at $3.73-3/4 per bushel (all figures US$). CBOT July wheat finished up 2-1/4 cents at $4.31-3/4 a bushel.

Corn futures advanced after USDA’s first official supply and demand forecasts for the 2017-18 marketing year pegged world corn ending stocks at 195.27 million tonnes. The figure was down from 223.9 million expected at the end of 2016-17 and below an average of analyst estimates for 209.72 million.

“The corn is the winner coming out of this, on new-crop ending stocks in the world,” said Don Roose, president of Iowa-based U.S. Commodities.

USDA’s forecasts of domestic corn ending stocks for both 2016-17 and 2017-18 also came in below the average trade expectations.

In soybeans, the CBOT July contract settled down 3-3/4 cents at $9.70-1/4 a bushel, retreating after a post-report jump to $9.89, the highest level since March 27.

USDA projected U.S. 2017/18 soy ending stocks at 480 million bushels, well below the average pre-report trade estimate of 563 million. But on the global front, USDA raised its forecast of 2016-17 soy ending stocks to 90.1 million tonnes, topping even the highest figure in a range of trade estimates.

“The world supplies on beans bumped up to 90.1 million tonnes, 2.5 million over what it was a month ago. I think that put the kibosh on the beans a little bit,” said Mark Gold, analyst with Top Third Ag Marketing.

Wheat futures ended higher on fund short-covering and spillover strength from corn. USDA projected global wheat ending stocks in 2017-18 at 258.29 million tonnes, above a range of trade expectations.

The government forecast that U.S. wheat inventories would fall to 914 million bushels by the end of 2017-18, down from 1.159 billion at the end of 2016-17.

— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Colin Packham in Sydney and Sybille de La Hamaide in Paris.

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