U.S. soybean futures crawled higher on Wednesday as hot weather in the U.S. Midwest encouraged traders to expect a lower harvest outlook in a government report due on Thursday.
Corn and wheat futures also rose in tentative trading in the run-up to the release of U.S. Department of Agriculture crop data.
The U.S. crop production and supply outlook is more uncertain than usual because soybeans and corn were planted later than normal in the spring due to rains. This will postpone the start of the autumn harvest.
Heading into the release of USDA data, traders wanted to “lightly trade their perception the day prior to the report,” said Tim Hannagan, an analyst at Walsh Trading.
Chicago Board of Trade November soybeans rose 3-1/4 cents to $13.58-1/4 a bushel (all figures US$).
A blast of late-summer heat baking the U.S. Midwest turned attention back to dry conditions that are thought to have stressed the soybean crop and lowered yields.
Light rainfall is expected in portions of the U.S. Midwest corn and soybean growing region, but a large portion of the soy area will remain dry, according to Commodity Weather Group. The best chance for rain is from the Nebraska/Kansas and Missouri/Iowa border in the western Midwest extending to Illinois, Indiana and Ohio in the east, the firm said.
Expectations for rains pressured soybean futures on Monday and Tuesday.
Traders are paying close attention to U.S. crop weather because large harvests are needed to replenish low inventories. USDA’s outlook on Thursday is not expected to be the final word on crop supplies.
“The market is probably more inclined to wait to see when the combines roll and what the yield monitors tell us,” said Ken Morrison, founder of commodity newsletter Morrison on the Markets.
In its September production forecast on Thursday, USDA is expected to trim its soybean yield estimate to 41.2 bushels per acre from 42.6 bushels in August, according to a Reuters poll.
Corn, wheat slip
December corn rose 3-1/2 cents to $4.72-1/2 a bushel. December wheat gained 1-1/2 cents to $6.48 a bushel.
Analysts expect the USDA to cut its estimate for the average corn yield to 153.7 bushels per acre, down from 154.4 bushels forecast in August.
Crop forecaster Lanworth on Wednesday edged its U.S. corn harvest forecast up to 13.396 million bushels, based on a yield of 152.2 bushels per acre, from 13.330 million. The firm trimmed its U.S. soybean production forecast.
In other news, private exporters reported the sale of 120,000 tonnes of U.S.-grown hard red winter wheat to Nigeria for delivery this marketing year, USDA said on Wednesday. The 2013-14 marketing year for wheat opened on June 1.
— Tom Polansek reports on the ag sector and futures markets for Reuters from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Colin Packham in Sydney.