By Tom Polansek
CHICAGO, Aug 12 – Chicago Board of Trade corn and soybean futures rose on Wednesday as short covering and profit-taking emerged after the U.S. Department of Agriculture confirmed expectations for massive crops.
The USDA, in a monthly report, said U.S. farmers will reap their biggest corn harvest and their second biggest soybean harvest as favorable summer weather has shepherded the crops through key phases of development. The agency raised its ending stocks estimates for both crops, although corn stocks came in lower than analysts had expected.
Traders are watching production and supply numbers carefully after the USDA said earlier this year that farmers planted fewer acres than analysts had expected.
“For the ending stocks number to come in slightly below the trade expectations, even with a yield number that came in slightly above trade expectations, that is a little bit friendly report for corn,” said Ted Seifried, chief ag market strategist for Zaner Group.
The most active corn futures on the Chicago Board of Trade were up 2 cents at $3.25-1/2 a bushel by 12:45 p.m. CDT (1745 GMT). Soybean futures were up 7-1/2 cents at $8.81 a bushel, while wheat was down 3-1/2 cents at $4.91-1/2 a bushel at the CBOT.
“We went into the report at the bottom of the ranges and pretty heavily sold,” said Matt Wiegand, commodity broker for FuturesOne. “When we decided that we weren’t going lower, that gave shorts some incentive to come in and take some profits.”
The USDA said its production estimates were based on conditions as of Aug. 1, and did not include the impact of a derecho storm that potentially impacted some 10 million acres of Iowa farmland.
“The trade will shift back to their focus on U.S. weather developments and impact from the recent derecho that could cause a massive loss of acreage from Iowa and Illinois,” said Terry Reilly, senior commodity analyst for Futures International. (Reporting by Tom Polansek in Chicago, Gus Trompiz in Paris and Colin Packham in Sydney; Editing by Rashmi Aich, Jane Merriman and Tom Brown)