Chicago | Reuters — U.S. soybean futures hit a 3-1/2-week high on Thursday after the U.S. Department of Agriculture cut its estimate of the 2016 soy harvest and lowered its forecast of domestic inventories, analysts said.
Wheat futures advanced after the USDA said farmers planted the fewest U.S. acres to winter wheat since 1909. Corn followed the firm trend, rallying from earlier declines.
Chicago Board of Trade March soybean futures settled up 28-3/4 cents at $10.40-1/4 per bushel after touching $10.41-1/4, the contract’s highest since Dec. 19 (all figures US$).
CBOT March wheat ended up 7-1/2 cents at $4.26-1/4 a bushel and March corn rose a penny at $3.58-1/4 a bushel.
Soybeans posted the biggest move on a percentage basis, buoyed by the USDA data. The government trimmed its estimate of the U.S. 2016 soybean yield to 52.1 bushels per acre, still an all-time high but down from its previous figure of 52.5 and below an average of trade estimates for 52.7. USDA pegged soybean production at 4.307 billion bushels.
“The biggest deal was the surprising revision for the production numbers for soybeans… What was surprising for us was the yield change, when a lot of people were expecting an increase,” said Rich Nelson, chief strategist for Allendale Inc.
USDA also lowered its forecast of U.S. 2016-17 soybean ending stocks to 420 million bushels, from 480 million last month. The U.S. is the world’s biggest soybean grower, followed by Brazil and Argentina.
“Given the lower-than-expected bean number, it puts a little bit more emphasis on the Argentine growing situation,” said Tom Fritz, analyst with EFG Group.
CBOT wheat futures jumped after USDA pegged U.S. winter wheat plantings for harvest in 2017 at 32.4 million acres, down 10 per cent from a year ago and the fewest in more than a century. Analysts said the decline reflected ample domestic supplies that have pressured farmgate prices.
“The returns just are not there for wheat farmers right now,” said Alex Norton, analyst with Beeson Inc.
However, underscoring burdensome old-crop supplies, USDA also reported U.S. Dec. 1 wheat stocks at 2.073 billion bushels, up from 1.75 billion a year earlier and the highest Dec. 1 figure since 1987.
Corn was under pressure after USDA’s reports confirmed hefty U.S. supplies after a record harvest topping 15 billion bushels. But the market rallied toward the closing bell, swept up with the advances in soybeans and corn.
— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Michael Hirtzer and Theopolis Waters.