U.S. grains: Corn lower as yield forecasts rise

(FIle photo by Allan Dawson)

Chicago | Reuters — U.S. corn futures fell on Friday on rising expectations of plentiful supplies from what should be a bumper Midwest harvest beginning later this month, analysts said.

Soybean futures firmed, led by strength in soyoil, and wheat rose on technical buying ahead of a three-day U.S. holiday weekend. Markets will be closed on Monday for Labour Day.

Chicago Board of Trade December corn settled down 2-1/2 cents at $3.55-1/4 per bushel (ll figures US$). November soybeans ended up 4-1/4 cents at $9.49-1/2 per bushel and December wheat rose 4-1/4 cents to $4.38-3/4 a bushel.

Corn came under pressure on rising U.S. corn yield forecasts from analytical and brokerage firms. Analytics firm Informa Economics raised its estimate of the U.S. 2017 corn yield to 169.2 bu./ac., from 165.9 a month ago, sources said.

Brokerage INTL FCStone on Thursday raised its estimate of the average U.S. corn yield to 166.9 bu./ac. from 162.8 in its previous monthly report.

The figures were below USDA’s August estimate of 169.5 bu./ac., but traders focused on the fact that both the private figures were up from a month ago. USDA is scheduled to release updated crop estimates on Sept. 12.

“The reality of the supply-side statistics is bearish, and that makes rallying difficult,” said Terry Linn, analyst with Linn + Associates.

A farmer survey conducted by commodity research and brokerage company Allendale Inc. put the U.S. 2017 corn yield at 166.7 bu./ac.

Soybean futures closed higher, with the benchmark November contract hitting a three-week top at $9.52 before settling at $9.49-1/2.

Soybeans drew strength from advances in soyoil. Most-active December soyoil settled up 0.61 cent at 35.67 cents/lb., after reaching 35.76 cents, its highest level since January.

Soyoil advanced after the U.S. Department of Agriculture said that domestic stocks of crude soyoil at the end of July fell to 1.628 billion lbs., down from 1.815 billion a month earlier.

“You are getting support from the crush report showing stocks down by almost 200 million pounds month-on-month. That’s a big drop,” Linn said.

Others cited expectations of increased demand from the soy-based biodiesel sector after the U.S. government in August slapped tariffs on imports of Argentine biodiesel.

Wheat closed higher in largely technical trade. CBOT wheat rose against Minneapolis Grain Exchange spring wheat futures as traders exited long MGEX/short CBOT spread positions.

— Julie Ingwersen is a commodities correspondent for Reuters in Chicago; additional reporting for Reuters by Colin Packham and Sybille de La Hamaide.

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