Chicago | Reuters — U.S. wheat futures rose two per cent on Thursday, recovering after a nearly three per cent drop a day earlier when bearish data in a monthly U.S. government crop report sent grain markets tumbling.
Soybean and corn futures staged modest rebounds, one day after the U.S. Department of Agriculture report stunned analysts by raising its forecasts for the U.S. 2015 corn and soybean crops.
At the Chicago Board of Trade, September wheat settled up 11 cents at $5.03-1/4 per bushel (all figures US$). New-crop November soybeans ended up 17 cents at $9.27 a bushel and December corn rose 7-1/4 cents at $3.75-1/4.
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Wheat posted the biggest gains by percentage, building its premium over corn.
“The wheat-corn spread is probably readjusting to USDA’s supply/demand report,” said Mike Zuzolo of Global Commodity Analytics, noting that the government’s yield and production figures signalled plentiful U.S. corn supplies in the 2015-16 marketing year.
However, some analysts said they still expected the USDA to scale back its harvest outlook for corn and soy, with attention now turning to next week’s Pro Farmer Midwest Crop Tour.
“Based on our conversations with agronomists and other industry participants, our initial expectations on the tour will be to find conditions that corroborate our downward bias to yields versus the USDA,” Societe Generale analyst Christopher Narayanan said in a note.
USDA on Wednesday raised its forecast of the U.S. 2015-16 corn crop to 13.686 billion bushels, the third-largest on record if realized, with an average yield of 168.8 bushels per acre. USDA put soybean production at 3.916 billion bushels with a yield of 46.9 bushels per acre.
Corn drew support from concerns about lost production in Europe following weeks of hot and dry weather. Analyst firm Strategie Grains cut its outlook for this year’s harvest in the European Union by more than 10 per cent and said yield prospects could deteriorate further.
The lightly traded CBOT August soybean contract surged 42 cents, to $9.93, on short-covering ahead of its expiration on Friday. Open interest in the contract stood at 709 contracts ahead of the trading session, compared to more than 360,000 lots open in the benchmark November contract.
— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Colin Packham in Sydney.
