Chicago | Reuters — Chicago Board of Trade (CBOT) soybean and corn futures set eight-month highs on Wednesday on concerns about the risk for more unfavorable crop weather in drought-stressed growing areas of South America, traders said.
The U.S. Department of Agriculture, in a monthly crop report, pegged Brazil’s soy crop at 134 million tonnes, down from 139 million in January, and Argentina’s soy crop at 45 million, down from 46.5 million. Analysts surveyed by Reuters, on average, expected 133.65 million for Brazil and 44.51 million for Argentina.
Brokers said USDA will likely need to make further cuts. Some private analysts have predicted Brazilian production dropping to around 125 million tonnes amid dry weather in the south of the country.
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“More of the focus is going to be on South American weather,” said Don Roose, president of Iowa-based broker U.S. Commodities. “The crops continue to sink with the weather in southern Brazil and Argentina.”
The USDA report pegged world soybean ending stocks at 92.83 million tonnes, down from 95.20 million last month but above expectations for 91.51 million, and world corn stocks at 302.22 million, down from 303.07 million previously but above estimates for 300.32 million.
The most-active CBOT soybean contract settled up 25-3/4 cents at $15.94-3/4 a bushel (all figures US$). The contract earlier reached $15.99-1/2, its highest price since June.
Most-active corn futures ended up 14-1/2 cents at $6.46-3/4 a bushel after reaching $6.47-3/4, their highest price since June. CBOT wheat finished up 6-1/4 cents to $7.85 and touched its highest price this month.
The USDA report said U.S. soybean supplies will be smaller than previously forecast as demand from the crushing industry rose. Carry-out was pegged at 325 million bushels, compared to 350 million in January and analysts’ estimates for 310 million.
U.S. wheat ending stocks were estimated at 648 million bushels, above expectations for 629 million. USDA left the U.S. corn carry-out at 1.54 billion bushels, above expectations for 1.512 billion.
— Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Gus Trompiz in Paris, Naveen Thukral in Singapore and Karl Plume in Chicago.
