Glacier FarmMedia MarketsFarm — The United States Department of Agriculture’s grain stocks as of Sept. 1 greatly affected grain futures at the Chicago Board of Trade (CBOT).
With the report issued Sept. 30, U.S. corn stocks were at 1.76 billion bushels and below the trade’s average estimate of 1.844 billion. However, that was 400 million bushels more than a year ago. The December corn contract gained 17.25 cents during the week ended Oct. 2 to close at US$4.3250 per bushel.
Ryan Ettner, trader for Allendale Inc. in McHenry, Ill., said the report was one of two main contributors to corn’s recent rally, with the other being short-covering by the funds.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
“This is now week nine for fund short-covering in corn and it’s week five for short-covering in soybeans,” he said. “I would simply say there is active short-covering in all three (major) grains.”
For U.S. wheat, stocks as of Sept. 1 were at 1.986 billion bushels, a four-year high. That was up 12 per cent from the year before and more than 12 million bushels compared to the trade’s estimate. December wheat contracts advanced between 26 and 38.25 U.S. cents/bu. during the week.
Ettner said weather concerns for wheat in the U.S. Plains and in Russia drove up prices.
“Some analysts are already talking about losing 10 to 15 per cent of acreage due to how dry it is in the Plains,” he said, calling the analysts’ prediction a bit “extreme.” “As of (Oct. 2), there will be no rain in the forecast for 10 days.”
Just like corn, U.S. soybeans had fewer stocks than expected. While they were up 78 million bushels from one year earlier at 342 million, stocks were still nine million below the average trade guess. Despite five weeks of short-covering, soybean prices remained relatively steady with the November contract moving up 2.75 U.S. cents/bu. to close at US$10.56 on Oct. 2.
“Some people are saying beans are rallying to South American weather. But South American weather has made some recent changes and we haven’t seen beans react to that,” Ettner said.
He added corn should maintain its momentum over the next week or so, while soybeans will remain sideways and rangebound. As for wheat, the trade will keep an eye on weather maps.
“The moment they put any rain into the Plains forecast for the 10-day outlook, that will stop the bounce and you’ll probably have 30 per cent of a correction.”
