Chicago | Reuters — U.S. soybean futures jumped to a one-week high on Friday after the U.S. Department of Agriculture lowered its domestic production estimate more than analysts had expected.
Corn futures touched a two-week low on bigger-than-expected U.S. production and inventory estimates in the agency’s monthly crop reports.
USDA surprised traders in both markets by making larger-than-expected cuts to its estimates for the number of acres of corn and soybeans that will be harvested this year. Wet weather early in the summer reduced the number of acres.
Still, harvests are expected to be large due to strong yields and large plantings.
“The bullish surprise is the acreage,” said Jack Scoville, analyst for Price Futures Group in Chicago. “The cuts in the acreage were at least as much as anybody was talking about, but the yields are clearly there.”
Chicago Board of Trade November soybeans ended up 4-1/2 cents to $8.85-3/4 a bushel after trading to $8.97, the highest price for a front-month contract since Oct. 1 (all figures US$).
CBOT December corn dropped 8-1/2 cents to $3.82-3/4 after trading to $3.81-1/2, the lowest price for a nearby contract since Sept. 25.
USDA raised its estimate for the average corn yield to 168 bushels per acre from its September estimate of 167.5 bushels, surprising analysts who had expected a slight decline. The soybean yield increased in line with traders’ expectations.
“There’s nothing positive about the corn number,” said Don Roose, president of U.S. Commodities in Iowa. “Big crops get bigger so we will see if we grow from here.”
Large world supplies limited gains.
Brazil’s government crop supply agency, Conab, forecast a record soybean crop of 100.1 million to 101.9 million tonnes in the 2015-16 crop year, as farmers expand planted areas.
In export news, Egypt’s state grain buyer, the world’s biggest importer of wheat, bought 180,000 tonnes of Russian and Romanian wheat in a tender.
CBOT December wheat fell 2-1/4 cents to $5.09-1/4.
— Tom Polansek reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.