CHICAGO- US corn and soybeans were steady to higher on Friday as investors looked past revised US Department of Agriculture (USDA) supply-and-demand projections and focused on improved prospects for exports to China, which is due to sign an interim trade deal with the United States next week.
The USDA data, released during Friday’s trading session, showed modest changes to crop production and stocks but did not include the agency’s outlook for post-trade deal demand from China.
The USDA’s eagerly awaited estimates for 2019 US corn and soybean production also remained uncertain after the agency said it would resurvey farmers in five northern states where poor weather left many acres unharvested.
“This report is not a game changer,” said Don Roose, president of US Commodities in West Des Moines, Iowa.
“We were handcuffed going into the report with larger supplies around the world with improved weather in South America and hopes of some better demand from China. We come out of the report looking at the same thing,” he said.
The USDA unexpectedly raised its corn and soybean yield estimates, which surprised some traders following unfavorable crop weather last year followed by a challenging harvest. The increases were partly offset by fewer harvested acres.
US corn production for the 2019/20 marketing year was 13.692 billion bushels, based on an average yield of 168.0 bushels per acre. Soybean production was 3.558 billion bushels, with average yields of 47.4 bushels per acre.
The government’s closely watched quarterly grain stocks data showed supplies down from a year ago.
South American crop forecasts were left unchanged.
US winter wheat plantings declined, as expected, to the lowest point since 1909, although the USDA’s estimate was slightly above the average trade forecast.
Chicago Board of Trade March corn was 2-1/2 cents higher at $3.85-3/4 a bushel, reversing a pre-report drop to $3.76-1/2 a bushel, the lowest since Dec. 13. The contract fell 0.2 percent in the week, its second straight weekly decline.
March soybeans gained 2-1/2 cents to $9.46. They had dropped shortly after the USDA data release to a three-week low of $9.35-1/2, but ended with a 0.5 percent weekly gain.
CBOT March wheat rose 2-1/4 cents to $5.64-1/2 a bushel and gained 1.8 percent in the week. The contract peaked at $5.68-1/2 a bushel ahead of the report, which was the highest for a most-active contract since August 2018.
The USDA on Friday raised its estimate of domestic corn and soybean production despite adverse weather throughout the fall that had been expected to curtail yields.
The government also said winter wheat plantings fell to 30.804 million acres, the lowest since 1909.
US corn production for the 2019/20 marketing year came in at 13.692 billion bushels, based on an average yield of 168.0 bushels per acre, USDA said in a monthly report.
Soybean production was 3.558 billion bushels, with average yields of 47.4 bushels per acre.
“The market should be disappointed about the production number for both corn and soybeans – yields going higher – not many people were expecting that,” said Ted Seifried, chief strategist with brokerage Zaner Group in Chicago. “That was a little bit of a disappointment for the trade.”
The bigger-than-expected harvests are another blow to a US market struggling with weak demand amid a US-China trade war. – Reuters