U.S. grains: Corn, soy, wheat futures surge on lower-than-expected stocks

CBOT November 2020 soybeans with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — Chicago Board of Trade grain and soybean futures soared on Wednesday after the U.S. Department of Agriculture surprised traders by reporting crop inventories that were smaller than expected.

Supply levels have declined after China, the world’s top soybean importer, stepped up its purchases of U.S. farm goods this summer.

Corn supplies dropped by 3.024 billion bushels and soybean supplies fell by 858 million bushels during the three months ended Sept. 1, the second-biggest summer drawdowns ever for both commodities, according to the agriculture department’s quarterly stocks report.

“We’re staring down the barrel of a tighter soybean carryout that is bullish,” said Terry Reilly, senior analyst for Futures International.

CBOT November soybeans ended up 30-1/2 cents at $10.23-1/2 per bushel after reaching $10.34-3/4, the highest price since Sept. 22 (all figures US$). December corn closed 14-1/4 cents higher at $3.79 per bushel after reaching $3.82-3/4, its highest since March 6.

CBOT December wheat settled up 28-1/2 cents at $5.78 per bushel after reaching $5.87, the contract’s highest since Jan. 24. It was the highest price for a most-active wheat contract since March 27.

The gains benefit U.S. farmers who are about to harvest large corn and soybean crops.

“The farmer has no incentive to take their beans and put them into storage,” said Joe Vaclavik, president of Standard Grain brokerage. “The incentive is to take the beans and sell them.”

Soybean stocks as of Sept. 1 stood at 523 million bushels, according to the agriculture department. Corn stocks were 1.995 billion bushels and wheat stocks were 2.159 billion bushels.

On Thursday, traders will assess separate U.S. data on weekly export sales.

“China has been holding the reins of the bull market and it will be crucial to see if export sales continue at a rapid clip,” said Rabobank commodity analyst Michael Magdovitz.

— Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Christopher Walljasper in Chicago, Gus Trompiz in Paris and Naveen Thukral in Singapore.

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