U.S. grains: Soy firm, corn mixed ahead of USDA report

CBOT November 2019 soybeans with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — U.S. soybean futures jumped to a 1-1/2-week high on Friday and posted their first weekly gain in a month, lifted by technical buying and short-covering amid concerns that dry U.S. Midwest weather would limit crop production.

Corn and wheat were mixed as investors squared positions ahead of an eagerly awaited U.S. government supply-and-demand report scheduled for release on Monday. Both markets also notched their first weekly gains in a month.

The market’s main focus remained on the U.S. Department of Agriculture’s (USDA) monthly report, due for release during Monday’s trading session, that is due to include highly anticipated revisions to rain-hit U.S. corn and soybean planting.

“The market is likely to continue positioning ahead of that report and it seems loose shorts are jumping off for now,” said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia.

Analysts polled ahead of the USDA report expect the agency to cut corn and soybean acreage and production, although uncertainty over the size of adjustments from prior forecasts has kept market participants on edge.

Grain markets were supported this week by dry weather in key corn and soy production areas of the U.S. Midwest, which could dent yield prospects after excessive spring rains that delayed or prevented many farmers from planting.

“It feels like the dryness has taken the edge off of the crop conditions,” said Jim Gerlach, president of A/C Trading.

More corn and soybean crops are entering their key yield-determining phases of development when dry conditions could impact yields.

USDA will issue its next crop condition ratings on Monday afternoon.

“Today our bias is for (ratings to be) steady to maybe a few points lower,” Gerlach said.

Chicago Board of Trade November soybean futures rose 8-3/4 cents to $8.91-3/4 per bushel for a 2.7 per cent weekly gain (all figures US$).

September corn shed 3/4 cent to $4.10-1/4 a bushel but ended the week up 2.7 per cent, while September wheat added one cent to close at $4.99-1/2 a bushel, up 1.9 per cent in the week.

Markets are also monitoring developments in a deepening trade war between the United States and China that has already slashed U.S. agricultural exports to the world’s top commodities importer.

U.S. President Donald Trump said Friday that he was not ready to make a trade deal with China, fanning fears of a drawn-out and disruptive trade dispute that is now in its second year.

Reporting for Reuters by Karl Plume in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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