U.S. grains: Corn extends run to one-month top on USDA yield cut

(FIle photo by Allan Dawson)

Chicago | Reuters — U.S. corn surged to a one-month high while wheat and soybean futures also rose sharply on Monday as investors bet the U.S. Department of Agriculture will reduce crop production forecasts in reports due in the coming weeks.

Traders also exited short positions in nearby Chicago Board of Trade contracts as September corn, wheat and soybean futures expired at 12:01 p.m. CT.

Corn prices extended gains to their sixth straight session — the longest streak of higher prices since October 2014 — in the wake of USDA’s outlook on Friday for lower corn production and higher soybean production.

Analysts said USDA could reduce estimates for both corn and soybean output in the agency’s next monthly report due on Oct. 9. USDA will release quarterly grain stocks totals and wheat production on Sept. 30.

“Corn still has some follow-through buying from the friendly-looking corn report. Attitudes are that, given the variabilities that we still hear from Illinois east, there is potential that the national U.S. yield will inch lower in subsequent reports,” EFG Group analyst Tom Fritz said.

“There is talk your harvested soybean acres will be down half a million (acres),” Fritz added.

Most-active CBOT December corn settled up 6-1/2 cents at $3.93-1/2 per bushel, equaling the session high from Aug. 12, a day that also saw the release of a monthly USDA crop report (all figures US$).

Soybeans for November delivery climbed 10 cents to $8.84-1/4 per bushel, rebounding from a contract low reached in the previous session.

USDA in a weekly report after the close of trading said the corn harvest was five per cent complete, matching analyst expectations but down from the five-year average pace of nine per cent for this week.

USDA left corn good-to-excellent condition ratings unchanged at 68 per cent and rated the soybean crop at 61 per cent good to excellent, down two percentage points. Analysts polled by Reuters, on average, predicted ratings for each crop would decrease by one percentage point but the ratings were within the range of expectations.

Wheat futures gained as much as three per cent, largely on short covering as global supplies of wheat, corn and other feed grains remained plentiful, analysts and traders said.

CBOT December wheat was 16-1/4 cents higher at $5.01-1/4 per bushel, a roughly two-week peak.

Michael Hirtzer reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Julie Ingwersen in Chicago, Gus Trompiz in Paris and Naveen Thukral in Singapore.


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