U.S. grains: Soy steadies after tumbling on higher crop estimate

Chicago | Reuters — U.S. soybeans firmed on Wednesday in a light technical rebound one day after the U.S. Department of Agriculture surprised analysts by raising its estimates of the U.S. corn and soybean yields.

Corn futures ended flat while wheat was modestly higher, paring gains after the Chicago Board of Trade December contract hit a near one-month high on what appeared to be fund short-covering, traders said.

CBOT November soybeans settled up 10 cents at $9.60-1/2 per bushel while December corn ended unchanged at $3.51-1/2 a bushel (all figures US$). December wheat finished up 1-1/4 cents at $4.43-1/4 a bushel.

Broad strength in commodities lent underlying support. The 19-market Thomson Reuters CoreCommodity Index was up 0.8 per cent as oil prices climbed.

Soybeans rose, halting a four-session slide, although the most-active November contract stayed inside of Tuesday’s trading range.

“I’m sure we are creating some consumptive buying, even with the dollar being higher. But it’s not blowing anyone’s socks off to the upside,” said Jack Scoville, analyst with the Price Futures Group in Chicago.

Fresh export demand lent support. USDA said private exporters sold 167,370 tonnes of U.S. soybeans to Mexico for delivery in the 2017-18 marketing year that began Sept. 1.

Still, Scoville and others said rallies in soy and grains were limited by the USDA’s forecast in a monthly report on Tuesday for a record-large U.S. 2017 soybean harvest totalling 4.431 billion bushels, with an average yield of 49.9 bushels per acre.

USDA pegged the U.S. corn yield at 169.9 bu./ac. The government’s yield estimates for both crops were above most analyst estimates.

Traders are turning their attention to the U.S. harvest, which is just getting started in southern stretches of the Midwest. Harvest reports should offer clues about whether USDA will need to adjust its yield estimates in future reports.

Focus is also shifting to South America, where farmers are preparing to plant soybeans and corn. Dry conditions could slow seeding in parts of Brazil, while excessive rains are threatening seedings in parts of Argentina.

CBOT wheat edged higher. The December contract reached $4.49-3/4 a bushel, its highest since Aug. 17, but pared gains as the dollar index firmed, theoretically making U.S. grains less attractive on the world market.

— Julie Ingwersen is a commodities correspondent for Reuters in Chicago; additional reporting by Naveen Thukral in Singapore and Gus Trompiz in Paris.

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