U.S. grains: Soy climbs to one-week high on yield worries

Chicago | Reuters — U.S. soybean futures rose to a one-week high on Wednesday on concerns that the U.S. Department of Agriculture (USDA) might lower its forecast of the domestic soybean yield in a monthly report next week, traders said.

Corn firmed along with soybeans as firm cash markets lending support. Wheat drifted lower but the bellwether December contract held above a contract low set a day earlier.

Chicago Board of Trade January soybeans settled up 6-1/2 cents at $9.91-1/4 per bushel after reaching $9.95, the contract’s highest since Oct. 20 (all figures US$).

CBOT December corn ended up 2-1/2 cents at $3.48-1/4 and December wheat fell 1/2 cent at $4.18.

Soybeans climbed on technical selling and fears the U.S. crop, while still a bin-buster, might not be as large as USDA projected in October.

“The yields just are not out there, not quite as high as the government says they are,” said Mark Gold, managing partner at Top Third Ag Marketing.

USDA last month lowered its forecast of the U.S. 2017 soybean yield to 49.5 bushels per acre, and some expect the government to trim its estimate again in its next monthly supply and demand reports on Nov. 9.

After the CBOT close, commodity brokerage INTL FCStone kept its forecast of the U.S. 2017 soybean yield at 49.9 bu./ac., unchanged from its previous monthly estimate. The firm raised its U.S. corn yield estimate to 173.7 bu./ac., from 169.2 last month.

More private analysts are expected to release updated crop estimates in the coming days.

CBOT corn futures closed modestly higher on short-covering, but hovered near life-of-contract lows, a factor that has encouraged farmers to store a portion of their harvest and hold out for a rally.

“Cash corn in the heart of the Midwest is hovering around $3 (per bushel), and the producer really isn’t interested in selling. For the most part, unless you had monster yields, you are below the cost of production,” said Don Roose, president of Iowa-based U.S. Commodities.

CBOT wheat drifted lower, hovering near Tuesday’s contract lows with pressure from abundant world supplies and hefty Russian exports.

“The background picture is still bearish, with record-large Russian wheat exports still entering the world market with no signs of serious Russian logistics problems.” said Matt Ammermann, commodity risk manager at INTL FCStone.

— Julie Ingwersen is a commodities correspondent for Reuters in Chicago; additional reporting by Michael Hogan and Naveen Thukral.

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