Chicago | Reuters – Chicago Board of Trade (CBOT) grain futures see-sawed on Tuesday, as technical trading left wheat prices flat, soybeans down and corn still stubbornly range-bound.
CBOT corn futures ended the day on a positive note, but hopes of a significant price rally were quashed by conflicting cues that have left traders uneasy for weeks.
“The market feels very uncomfortable with the corn acres estimates, the yields, the plant development of where we’re at,” said Don Roose, president of U.S. Commodities.
The supply side is bullish on corn, but current forecasts of corn carryout are massive, “with the largest ending stocks in U.S. corn since 1987,” Roose said. “That means the trade is handcuffed.”
CBOT September corn futures closed the day up 3-1/4, at $4.25-1/2 a bushel – regaining some of its previous session’s losses.
Corn did find some underlying support from weather forecasts of above-normal temperatures returning to much of the U.S. Midwest next week, as well as a slight drop in corn conditions late Monday, traders said.
The U.S. Department of Agriculture reported that 57 per cent of U.S. corn was in good to excellent condition, down from 58% last week and below analyst expectations that it would stay at 58 per cent . Soybeans held steady, staying at 54 per cent .
Some 69 per cent of U.S. winter wheat was harvested, below market expectations of 73 per cent and the five-year average of 79 per cent .
Traders also said they are closely watching the results of USDA’s resurvey this month of crop acreage in 13 states for corn and 14 states for soybeans.
The survey, which is expected to wrap up this week, and its findings are expected to be factored into the USDA’s Aug. 12 supply and demand report.
“The markets are sort of waiting it out until then,” said Matt Connelly with Hightower Report.
Corn and soybean futures saw a flurry of midday trading, after Agriculture Secretary Sonny Perdue announced that the U.S. government will pay farmers hurt by President Donald Trump’s trade war with China a minimum of $15 per acre under an aid package to be unveiled before the end of this week.
There is also a possibility for another two sets of aid if a trade agreement is not reached by the fall, and 2020, respectively.
CBOT September wheat settled the day unchanged, at $4.87-1/4 a bushel. CBOT August soybeans also settled down 2-1/2 cents, or 0.45 per cent to $8.85-3/4 a bushel.