SINGAPORE: Chicago corn edged higher on Thursday, although gains were limited and the market traded close to its lowest since early 2021 on pressure from a US government forecast of all-time high production.
Wheat prices were also weighed down by a larger-than-expected US production forecast from the US Department of Agriculture (USDA), while soybeans rose on support from strong Chinese import data.
“The USDA’s outlook for record 2023/24 US corn production outlook of 15.3 billion bushels was reiterated this month, as higher acreage compensated for yield cuts,” Rabobank said in a report.
“Over the last two weeks, around 10 million metric tons of corn has been added to global supply expectations. Weather risks are receding - US crop conditions have climbed 5% in two weeks - and there’s more rain ahead.”
The most-active corn contract on the Chicago Board of Trade (CBOT) gained 0.2% at $4.84-1/2 a bushel, as of 0417 GMT, after dropping earlier in the session to lowest since January 2021 at $4.81 a bushel.
Wheat fell 1.2% to $6.25-1/4 a bushel after hitting its lowest since June 9 at $6.22 a bushel and soybeans added 0.8% to $13.38-1/2 a bushel.
US government said on Wednesday that farmers will harvest massive crops of both corn and soybeans this year, boosting the supply base despite drought conditions stressing plants during early stages of development.
The agency put the US 2023 corn crop at 15.320 billion bushels, up from 15.265 billion last month and above an average of analyst expectations for 15.234 billion.
All analysts banking on lower US corn yield
The USDA cut its US corn yield estimate to 177.5 bushels per acre (bpa), down 4 bpa from last month, reflecting the impact of dry conditions in June, but the lower yield was offset by a larger plantings estimate.
It also raised its forecast of US 2023/24 corn ending stocks by 5 million bushels to 2.262 billion bushels, in line with trade expectations and up significantly from the 1.402 billion bushels expected at the end of 2022/23.
The soybean market was underpinned China’s purchases.
China imported 10.27 million metric tons of soybeans in June, up 24.5% from a year ago, customs data showed on Thursday, as large purchases of cheap Brazilian beans reached the market.
The USDA lowered its 2023 soybean harvest projection to 4.300 billion bushels, down from 4.510 billion previously but still toward the high end of trade expectations.
The agency left its soy yield forecast unchanged at 52.0 bushels per acre.
Significantly, the government’s forecast of US 2023/24 soybean ending stocks, at 300 million bushels, came in above even the highest in a range of pre-report estimates.
The USDA also surprised analysts by raising its estimate of the US 2023 wheat harvest to 1.739 billion bushels, up from 1.665 billion in June and above a range of trade expectations.
The Rosario grains exchange cut its forecast for Argentina’s ongoing wheat harvest by about 4%, compared to a prior crop estimate, according to a report issued on Wednesday that blamed the revision on a lack of rainfall in some farming areas.
Commodity funds were net sellers of CBOT corn, soybean, wheat, soymeal and soyoil futures contracts on Wednesday, traders said.
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