Corn, soybeans edge up on bargain-buying; US crop outlook caps gains
SINGAPORE: Chicago corn futures rose on Wednesday after suffering its biggest one-day decline in almost a month while soybeans gained ground following a four-session losing streak with bargain-buying supporting the market.
A surprise increase in the forecast for US corn and soybean yields by the US Department of Agriculture (USDA) is unlikely to support any rally in both markets.
The most-active corn contract on the Chicago Board of Trade was up 0.2 percent at $3.52-1/4 a bushel by 0241 GMT. They slumped 1.7 percent in the previous session, the biggest one-day drop since Aug. 15. Prices fell to their lowest since Aug. 31 at $3.45-1/2 a bushel.
Soybeans gained 0.5 percent at $9.54-3/4 a bushel, having closed down 1 percent on Tuesday while wheat rose 0.2 percent to $4.43 a bushel, after ending Tuesday up 1.7 percent.
"Increase in corn yields was a total surprise and it is bearish news for the market," said an India-based agricultural commodities analyst. "The weather has not been as good as last year but crops seem to have been resilient in the face of adverse weather."
The USDA in a monthly report on Tuesday raised its estimate of the average US 2017 corn yield to 169.9 bushels per acre (bpa) from its August estimate of 169.5 bpa, above the average of analyst expectations for 168.2 bpa.
The agency increased its soybean yield estimate to 49.9 bpa, from 49.4 bpa in August, topping a range of trade expectations.
The USDA's estimates on wheat were bullish for the market.
It trimmed its world wheat ending stocks forecast for 2017/18 to 263.14 million tonnes, from 264.69 million in August.
Dry weather has limited US and Australian wheat production.
The Australian government on Tuesday lowered its estimate of the country's 2017/2018 wheat crop to 21.64 million tonnes, an eight-year low, from a March forecast of 23.98 million.
In news which could impact markets going forward, after strong weekend storms, early spring rainfall threatens to cut by half the planted area of soybeans and corn in Argentina's largest producing province of Buenos Aires, analysts said on Tuesday.
Above average levels of humidity now affect 4.8 million hectares (11.9 million acres), or 28 percent of Buenos Aires's agricultural lands, according to farm group Carbap. Moisture has been accumulating since early in the year.