Corn Futures Rise as USDA Cuts Yield Projection

Date : 11/08/2019 @ 9:05PM
Source : Dow Jones News

Corn Futures Rise as USDA Cuts Yield Projection

By Kirk Maltais

 

--Corn for December delivery rose 0.5% to $3.77 1/4 a bushel on the Chicago Board of Trade on Friday, as the USDA caught traders off-guard with its reduction to yield estimates for the 2019/20 crop.

--Wheat for December delivery edged 0.4% lower to $5.10 1/4 a bushel.

--Soybeans for January delivery fell 0.6% to $9.31 a bushel.

 

HIGHLIGHTS

 

WASDE Surprise: The USDA now places the corn yield at 167 bushels per acre, down from an estimate of 168.4 bushels per acre last month. While analysts polled by The Wall Street Journal had predicted a cut to 167.3 bushels per acre, traders had thought the corn crop was in better shape. Corn futures fell 3.6% over the last four sessions, anticipating a disappointing WASDE report. After the report was released midday Friday, the prices surged to $3.83 3/4 a bushel before retreating to a more modest gain at the close.

More Surprises: The USDA also defied expectations by not moving its projections for soybean yields or production, and raising its figure for ending stocks. The USDA maintained last month's view that the yield per acre would be 46.9 bushels and that production would be 3.55 billion bushels, but it ramped up inventories by 15 million bushels, to 475 million bushels.

 

INSIGHT

 

No Big Corn-cern: Despite the WASDE surprises, traders say the results don't dramatically change the longer-term supply picture for corn or the price movement for corn into 2020. "At the end of the day, supplies are adequate for now with little in the way of meaningful changes today, " said Doug Bergman of RCM Alternatives. "There is probably not much reason for corn to be in a hurry to go anywhere based just on today's numbers."

Trade Tenterhooks: Officials from the White House cast doubt on reports that the U.S. and China have agreed to drop tariffs upon the signing of mini-trade deal. "There is no agreement at this time to remove any of the existing tariffs as a condition of the phase one deal," said Peter Navarro, White House director of trade and manufacturing policy, on the Fox Business Network on Thursday night. "The only person who can make that decision is President Donald J. Trump, and it's as simple as that."

 

AHEAD

 

--Veterans Day is observed in the U.S. on Monday. Agriculture markets will be open.

--The USDA releases its weekly grain export inspections data at 11 a.m. ET Tuesday.

--The USDA provides its weekly update on U.S. crop progress at 4 p.m. ET Tuesday.

 

Write to Kirk Maltais at kirk.maltais@wsj.com

(END) Dow Jones Newswires

November 08, 2019 15:50 ET (20:50 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.


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