Corn, Soybean Futures Rise on USDA Harvest Forecasts
By Benjamin Parkin and Jesse Newman
Soybean futures rose on lower-than-expected government crop forecasts.
The U.S. Department of Agriculture on Thursday predicted that American farmers would produce 4.431 billion bushels of soybeans this year, unchanged from its September estimate. The agency lowered its yield estimates to 49.5 bushels an acre--down from 49.9 bushels a month earlier--offsetting higher acreage.
That was a surprise to traders expecting the soybean crop, over a third of which is harvested, to get bigger. The agency also lowered its domestic and global oilseed stockpile forecasts.
"It's constructive. We've eliminated the bean crop getting larger," said Dan Cekander, president of DC Analysis in River Forest, Ill. "Now there's a chance that the yield gets smaller. That psychology is supportive."
After the report, soybean futures for November at the Chicago Board of Trade rose 2.3%, to $9.87 3/4 a bushel, touching an 11-week high.
That momentum helped pull corn prices higher too, despite government projections showing larger supplies. CBOT December corn futures rose 1.3%, to $3.50 1/2 a bushel.
The USDA raised its corn production estimates to 14.28 billion bushels from 14.184 billion in September, with a higher yield of 171.8 bushels an acre, setting farmers up for the second-largest corn haul on record. Analysts were expecting to see a decrease.
Global wheat stocks for 2016-17 and 2017-18 also rose on larger harvest projections in Russia, the European Union and India. Russia's wheat harvest is expected to hit a new record this year, blowing past a previous record set in 2016.
"The international wheat numbers were devastating," said Charlie Sernatinger of ED&F Man Capital Markets.
December wheat futures fell 0.2%, to $4.32 1/2 a bushel, after rising earlier.
Write to Benjamin Parkin at firstname.lastname@example.org