Chicago | Reuters — U.S. corn futures dropped on Tuesday after the U.S. Department of Agriculture (USDA) projected supplies of the grain above market expectations in a monthly report, taking prices down from 7-1/2 year highs posted earlier in the day.
Soybean futures rose to a three-week top on a tighter supply outlook by USDA, rebounding from an earlier slump triggered by sinking corn futures. Wheat ended down even as USDA slashed its global stocks view by far more than analysts expected.
Corn led the sell-off as USDA only minimally trimmed its U.S. end-of-season stocks outlook and raised its export forecast by less than many traders had anticipated following record-large sales to China.
Tightening supplies of the feed grain and rising prices have prompted a shift by some livestock producers to use other feeds, including wheat.
“The surprise in the report is that the government only took (U.S. corn) exports up 50 million bushels despite the fact that we had huge Chinese buying,” said Don Roose, president of U.S. Commodities.
“With global wheat stocks down nine million metric tonnes, the USDA is trying to say that we are going to feed more wheat globally,” Roose said.
USDA projected U.S. corn ending stocks for the 2020-21 marketing year at 1.502 billion bushels and soybean ending stocks at 120 million bushels, both down from January. Analysts polled by Reuters had expected corn ending stocks of 1.392 billion and soy ending stocks of 123 million.
Chicago Board of Trade March corn futures were down 7-1/2 cents at $5.56-1/4 a bushel after peaking at $5.74-1/4 before the report, the highest for a most-active contract since June 2013 (all figures US$).
March soybeans were up 14 cents at $14.01-3/4 a bushel after briefly trading lower on the day. CBOT March wheat was down 6-1/4 cents at $6.49-1/2 a bushel.
— Reporting for Reuters by Karl Plume in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.