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U.S. grains: Soybeans, wheat set new contract lows before USDA reports

Wheat falls as USDA seen raising global supply estimate

Chicago | Reuters — New-crop U.S. soybean futures hit a new contract low on Wednesday and corn matched its contract low ahead of the release of U.S. crop reports that are expected to show a rise in the government’s harvest projections.

Wheat also notched a contract low, weighed down by plentiful global supplies.

Prices for new-crop corn and soybeans edged higher from their lows as traders bought back previously sold positions before the U.S. Department of Agriculture issues monthly supply/demand and production data on Thursday. However, nearby futures for both crops remained near four-year lows reached last week due to expectations that massive harvests will replenish inventories.

“The potential for a large crop and a bearish supply/demand report tomorrow gives the bulls little reason to buy corn in any big way,” said Tomm Pfitzenmaier, analyst at Summit Commodity Brokerage in Iowa.

Most-active Chicago Board of Trade December corn, which represents the autumn harvest, ended up 0.4 per cent at $3.45-3/4 a bushel after matching Tuesday’s contract low of $3.43 in earlier trading (all figures US$). Nearby September corn advanced 0.7 per cent to $3.38-3/4 a bushel, near a four-year low of $3.33-1/4 reached on Sept. 4.

New-crop November soybeans gained 0.1 per cent to $9.93-3/4 a bushel after setting a contract low of $9.90 in earlier trading. September soybeans dipped 0.5 per cent to $10.71 a bushel, above a four-year low of $10.64 reached on Sept. 4.

USDA is expected to raise its estimate for U.S. corn production to 14.288 billion bushels on Thursday, from its August estimate of 14.032 billion, according to a Reuters poll of analysts. The government’s estimate for soybean production is seen at 3.883 billion bushels, up from 3.816 billion last month.

“Currently the question for the market is to find out how large or record large the U.S. harvests will be, especially for soybeans,” said Ole Hansen, head of commodity strategy at Saxo Bank.

CBOT December wheat closed down 1.5 per cent at $5.19-3/4 a bushel after setting a new contract low of $5.19-1/4.

Commodity funds sold an estimated 5,000 wheat contracts, bought 3,000 corn contracts and were net even in soybeans, traders said.

Traders are “justifiably fearful” USDA will hike its estimate for global wheat production on Thursday, said Rich Feltes, vice president of research for brokerage R.J. O’Brien.

USDA is expected to raise its forecast for 2014-15 world wheat ending stocks to 193.75 million tonnes from its August estimate of 192.96 million.

— Tom Polansek reports on agriculture and ag futures markets for Reuters from Chicago. Additional reporting for Reuters by Michael Hogan in Hamburg and Naveen Thukral in Singapore.

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