Chicago | Reuters — U.S. corn and soybean futures rallied on Thursday after the U.S. Department of Agriculture (USDA) unexpectedly cut its 2022 harvest estimates for both crops, which would mean smaller-than-expected supplies.
Wheat futures gained on spillover support from rising corn and soy. Traders largely shrugged off USDA’s larger-than-anticipated winter wheat crop acreage estimate as drought in the Plains farm belt was seen restricting production.
USDA also estimated quarterly U.S. stocks of corn, soy and wheat below average trade estimates in its January crop reports, and trimmed its outlook for corn and soy production in drought-hit Argentina, where some traders said more cuts were warranted.
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The forecasts coincide with concerns about tightening global grain supplies and rising food prices.
“The biggest surprise was the downward revision in U.S. crop production, in particular corn and soybeans,” said Terry Reilly, senior commodities analyst with Futures International.
Chicago Board of Trade March corn was up 15 cents at $6.71 a bushel, the steepest gain in four months (all figures US$). March soybeans were up 25-1/2 cents at $15.18-1/2 a bushel, while CBOT March wheat gained 2-3/4 cents, to $7.42-3/4 a bushel.
Poor crop weather in Argentina has underpinned corn and soybean markets, offsetting pressure from expected bumper harvests in neighbouring Brazil.
Argentina’s Rosario grain exchange on Wednesday sharply cut its forecast for the 2022-23 soybean harvest, to 37 million tonnes from a previous forecast of 49 million, as the country faces its worst drought in 60 years.
The exchange also slashed its 2022-23 corn harvest estimate to around 45 million tonnes, from 55 million previously.
Brazilian statistics agency CONAB on Thursday trimmed its forecast of the 2022-23 soybean crop, but still pegged it at a record 152.7 million tonnes.
— Reporting for Reuters by Karl Plume in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.
