CHICAGO: Chicago Board of Trade grain futures ticked up on Friday and soybeans rebounded a day after hitting a one-month low, as the markets shook off bearish US Department of Agriculture supply/demand data.
Investors were puzzling over a continued discrepancy between the USDA and Brazilian crop agency Conab’s estimates on corn and soybean production.
The USDA on Thursday left its estimate for Brazil’s 2023/24 soybean crop unchanged at 155 million metric tons, while Conab reduced its projection to 146.522 million metric tons, blaming adverse weather. Jim Gerlach, president of A/C Trading, said USDA’s forecast was “foolish” and that Friday’s climb was an indication of that.
“All you have to do is look at the cash markets,” he said. “Brazilian soybean basis has posted a thunderous, thunderous rally. That tells me right there that the Brazil crop estimate is probably closer than the USDA crop estimate.”
The most-active corn contract on the CBOT added 5-1/2 cents to $4.34-1/4 a bushel by 12:15 p.m. CDT (1715 GMT) after falling earlier to its lowest level in more than a week.
CBOT wheat rose 4 cents to $5.55-3/4 a bushel, while soybeans were up 11-3/4 cents up at $11.71 a bushel. It won’t be clear whether USDA or Conab is closer to the mark until August or September, when Brazil releases export and crush data, said Dan Basse, president of AgResource Co.
“When we run out of cash beans we can say, ‘Okay, that was the size of the crop,” he said. The USDA on Thursday also cut its forecast for Argentina’s corn crop by 1 million tons to 55 million tons. Argentina’s Rosario grain exchange on Wednesday slashed its outlook by 6.5 million tons to 50.5 million tons, citing damage from the sprioplasma disease.
In the wheat market, there was background concern about the risk of war escalation in Ukraine disrupting Black Sea trade, analysts said.
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