CNS Canada — After the wet weather the U.S. Midwest has experienced lately, traders aren’t exactly sold on the latest numbers from the U.S. Department of Agriculture (USDA).
“We’re getting a lot of calls in and people talking about their beans are losing yield left and right, because the pods are splitting, beans are sprouting. Beans don’t like water even in harvest time,” said Scott Capinegro of Barrington Commodity Brokers in Illinois.
USDA on Thursday released its latest production and stocks estimates. In the reports, USDA raised the U.S. soybean yield to 53.1 bushels per acre and dropped the corn yield to 180.7 bushels per acre.
In the immediate aftermath of the release, soybean and corn markets rose. At the end of the trading day, both contracts closed higher, the December CBOT corn contract at $3.70 per bushel and November CBOT soybean contract at $8.58 per bushel (all figures US$).
According to Capinegro, the report didn’t contain any huge surprises; however, traders had been expecting the corn yield to be increased.
“Not a super surprise but the funds have been short. And we have, especially for corn you had short covering the last week and a half because the open interest never went up,” he said.
The 2018-19 soybean carryout estimate saw an increase to 885 million bushels, which may not see a change anytime soon, according to Capinegro.
“You’ve still got the China (situation) and it sure sounds like that’s going to stick around the trade war for a while,” he said.
Heading into the next week, traders will be paying close attention to the forecast in the Midwest, which is supposed to see drier weather.
“(It’s expected to be) cool but drying out. So they should be getting back in the field for next week,” Capinegro said.
— Ashley Robinson writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.