U.S. grains: Corn, soybeans, wheat futures dive after USDA report

Chicago/Reuters – U.S. soybean and corn futures tumbled nearly 4 percent on Thursday after the U.S. Department of Agriculture’s yield and production forecasts for both crops came in above trade expectations.

Wheat futures also fell on a larger-than-expected crop forecast for U.S. spring wheat despite drought in the northern Plains crop belt.

As of 12:52 p.m. CDT (1752 GMT), Chicago Board of Trade November soybean futures were down 34 cents at $9.39-1/4 per bushel after hitting $9.38-3/4, the contract’s lowest since June 30.

CBOT December corn was down 14-1/2 cents at $3.71-3/4 after hitting $3.71-1/4, its lowest since Sept. 30, 2016.

“No doubt about it, the U.S. yield numbers were off the charts compared to trade guesses on both the corn and beans, and even the spring wheat numbers were higher than expected. We should stay under pressure all day,” ED&F Man Capital analyst Charlie Sernatinger wrote in a note to clients.

The USDA projected the U.S. corn yield at 169.5 bushels per acre (bpa), below its previous forecast of 170.7 but above an average of trade estimates for 166.2 bpa.

For soybeans, the USDA put the yield at 49.4 bpa, above its previous forecast of 48.0, surprising analysts who expected a reduction.

“The biggest issue is the rise in soybean yield, and no doubt there will be adjustments down the road,” said Rich Nelson, chief strategist at Allendale Inc.

Others noted that U.S. crop weather has improved in August, the most important month for determining soybean yields.

“Though not quite to the record of 2016/17, this still could be a huge (soybean) crop, especially with such large acreage,” Alex Norton of Beeson & Associates wrote in a client note.

CBOT wheat futures fell about 4 percent, with the December contract down 17-1/2 cents at $4.69-1/4 per bushel, after the USDA’s estimate of the U.S. spring wheat crop topped trade expectations.

MGEX December spring wheat was down 22-3/4 cents at $7.22-3/4 after hitting $7.20, its lowest since June 29.

The USDA estimated U.S. production of spring wheat other than durum at 402 million bushels, down from 423 million in July but well above the average trade estimate of 393 million.

“Given the disaster spring wheat crop and horrible conditions, this modest decline was a surprise to traders,” Norton said.


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