U.S. corn jumps 1.5 per cent on spreading, short-covering

U.S. corn futures closed higher on Friday for the first time this week and soybeans ended flat after a choppy trading session as investors squared positions before the weekend and ahead of a monthly U.S. government crop report next week.

Scattered rains were forecast for parts of the Midwest farm belt over the coming week, but uncertainty over how beneficial the precipitation may be to developing crops kept markets on
edge.

Unwinding of short-corn/long-soybean spreads supported corn prices and kept a lid on soy.

Corn notched its steepest weekly decline in six weeks as the harvest of a likely record-large U.S. crop was accelerating, while soybeans rose for a fifth straight week as recent dry weather likely eroded yields.

Wheat notched its first gain in eight sessions in a short-covering and technical buying bounce, although prices remained anchored by harvest progress and uncompetitive U.S. export prices.

“We’re getting some pre-report positioning. The beans have had a pretty good run,” said Sterling Smith, futures specialist with Citigroup.

“The weaker dollar overall is lending some strength but that is being counter-balanced by the ideas that we’re going to see at least some scattered showers starting late this weekend across some of the beleaguered areas in Iowa.”

Chicago Board of Trade November soybeans rose 1/4 cent to $13.67-3/4 a bushel and was up 0.7 per cent on the week. CBOT December corn added 7-1/4 cents, or 1.5 per cent, to $4.68-1/4 a bushel but fell 2.9 per cent in the week.

CBOT December wheat rose 7-1/2 cents, or 1.2 per cent to $6.47-3/4 per bushel but finished the week down one per cent for the first weekly drop in three weeks.

A midmorning yield and production forecast by closely followed analytical firm Informa Economics triggered a knee-jerk price drop in soybeans as the group’s soybean yield forecast was slightly above expectations.

Informa forecast the average U.S. soybean yield at 42.4 bushels per acre, down from its prior estimate of 42.7 bu./ac., and cut its corn yield estimate to 157.2 bu./ac. from 158.6 previously, trade sources said.

The U.S. Department of Agriculture will update its crop production forecasts next Thursday.

Analysts on average expected the U.S. soybean yield to fall to 41.2 bu./ac. and the corn yield to dip to 153.7 bu./ac.

Modest amounts of rainfall were expected in nearly all of the U.S. Midwest corn and soybean growing region from the weekend into next Thursday, an agricultural meteorologist said.

“There will be good coverage, but we’ll see crop stress return without follow-up rains,” said Andy Karst, meteorologist for World Weather Inc.

— Karl Plume reports for Reuters from Chicago. Additional reporting for Reuters by Sam Nelson.

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