US grain and soyabean futures jumped on Tuesday on expectations that the US Agriculture Department may lower its domestic harvest estimates at the end of the week. Short-covering in the markets ahead of the release of Agriculture Department (USDA) crop reports on September 11 helped lift nearby wheat futures from a five-year low reached on Friday. Still, large global supplies and stiff competition for export business kept a lid on gains.
Traders believe the USDA may cut its yield estimates for corn and soyabeans in the monthly reports because of unfavorable weather, said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa. Results from the early corn harvest in the Mid-South and Delta have already been disappointing, compared with expectations, he added.
"It is possible that a lower yield estimate will trigger a rally in anticipation of Friday's numbers or possibly prompt a rally after the report Friday," Pfitzenmaier said. Last week, condition ratings for the corn and soyabean crops likely declined as hot temperatures stressed some plants, analysts polled by Reuters said. Other fields likely started to die off naturally ahead of the autumn harvest.
The USDA will update its crop ratings in a weekly report due at 3 pm CDT. At the Chicago Board of Trade, December corn advanced 5-1/4 cents, or 1.4 percent, to $3.68-1/4 a bushel. November soyabeans climbed 12-3/4 cents, or 1.5 percent, to $8.79-1/4. December wheat gained 7-1/4 cents, or 1.5 percent, to $4.75 a bushel. The thinly traded front-month wheat contract hit a five-year low of $4.55-1/2 on Friday.
Jitters about Chinese growth have weighed on soyabean prices recently as China dominates global demand for the oilseed. China imported 7.78 million tonnes of soyabeans in August, up 29 percent year-on-year but down 18.1 percent from July's record shipments as cheap supplies from South American producers petered out. In wheat, large global supplies continued to hang over the market. Australian production of wheat and canola will be higher than previously expected in 2015/16, the country's chief commodity forecaster said.
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