CBOT weekly outlook: Corn, soy react fittingly to USDA reports

(Lisa Guenther photo)

CNS Canada — Traders had a lot to sort through with two big U.S. Department of Agriculture (USDA) reports released Thursday, but at a glance the markets reacted accordingly, according to one trader.

USDA on Thursday released its world agricultural supply and demand estimates (WASDE) and crop production reports.

“The market reaction, I think, was pretty much normal in the bean market, where it traded sharply higher,” said Terry Reilly of Futures International in Chicago, shortly after the reports were released.

The Chicago Board of Trade (CBOT) July soybean contract jumped more than 15 cents when the reports were released, eventually closing the day 3.75 cents higher at $10.2125 per bushel (all figures US$).

The CBOT July corn contract rose more than five cents before ending the day one cent lower at $4.02 per bushel.

The WASDE report pegged U.S. corn ending stocks for 2018-19 at 1.7 billion bushels, which would be down 500 million bushels from the 2017-18 projection. U.S. soybean ending stocks are also predicted to be lower at 415 million bushels, down 115 million from the 2017-18 crop year.

Reilly was still sorting through the reports but said it should be noted that global carryout for new-crop soybeans is pegged at 86.7 million tonnes, down from 92.2 million tonnes from 2017-18.

The soybean carryout “came at a pretty bullish number, in that it came in below trade expectations,” he said.

Now that the USDA reports are out, Reilly said attention will shift back to weather, which has seen conditions improving as of late.

“Generally other than disruptions in the Midwest here and there over the next five days… we’re going to get into a little bit of a drier pattern where producers will be running in their fields at full throttle,” Reilly said.

Conditions are also improving in Argentina, where rain has fallen following a months-long drought.

Argentina is expected to “begin to dry down starting tomorrow, where harvesting activities should resume,” Reilly said. “And southern Brazil’s expected to get a little bit of light rain as well, which would be very good (for) the corn crop that’s pollinating.”

— Ashley Robinson writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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