U.S. grains: Corn sets one-year highs on tighter old-crop U.S. supply

Chicago | Reuters — U.S. corn futures reached one-year highs and soybeans jumped on Friday as the U.S. Agriculture Department made bigger-than-expected cuts to its estimates for stocks of crops left over from last year’s harvests.

The reductions, revealed in a monthly USDA report, added to concerns about supplies among traders worried that persistent rains will hurt yields for the autumn harvests.

On Monday, traders will assess weekly USDA crop ratings for an update on whether conditions are deteriorating or improving.

USDA, in Friday’s report, kept its U.S. corn and soy yield forecasts unchanged from June, surprising some analysts who had expected lower estimates due to the wet weather. Many predicted the government would need to cut the estimates next month to reflect damage in the fields.

“The focus should be entirely on the old crop on this report and, with that, the stocks for corn and soybeans were smaller than expected,” said Rich Nelson, chief strategist for brokerage Allendale in Illinois.

“I would still call this a net-bullish reaction due to tighter-than-expected old-crop stocks and, therefore, a tighter new-crop picture.”

Chicago Board of Trade September corn gained six cents, to $4.34-3/4 a bushel after trading at $4.39-1/4, the contract’s highest price since July 3, 2014 (all figures US$). New-crop December corn rose six cents to $4.45 after reaching a one-year high of $4.49.

August soybeans added 5-3/4 cents to close at $10.32 a bushel after hitting $10.48-1/4, the highest price since the market touched a six-month high last week.

Commodity funds bought an estimated 11,000 corn contracts and 6,000 soybean contracts at the CBOT, trade sources said.

August soybeans could rise to trade between $10.75 and $11.00 after the USDA on Friday reduced its 2014-15 U.S. soybean ending stocks to 255 million bushels from its June outlook of 330 million, said Terry Reilly, senior commodity analyst for grain and oilseeds at Futures International in Chicago.

For the next harvest, more unwanted rain is expected in the Midwest this weekend and next week. Recent storms have flooded some fields, preventing farmers from finishing soybean plantings and raising concerns about yield losses for crops in the ground.

September wheat fell two cents to $5.76 a bushel after USDA raised its estimate for global 2015/16 supplies to a record high. Funds sold an estimated 5,000 wheat contracts.

Tom Polansek reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore.

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