Soya, corn and wheat up

September 13, 2013

Corn, soya
Corn, soya

US soya futures crawled higher on Wednesday as hot weather in the US Midwest encouraged traders to expect a lower harvest outlook in a government report due on Thursday. Corn and wheat futures also rose in tentative trading in the run-up to the release of US Department of Agriculture crop data.

The US crop production and supply outlook is more uncertain than usual because soya and corn were planted later than normal in the spring due to rains. This will postpone the start of the autumn harvest. Heading into the release of USDA data, traders wanted to “lightly trade their perception the day prior to the report,” said Tim Hannagan, an analyst at Walsh Trading.

Chicago Board of Trade November soyabeans rose 3-1/4 cents to $13.58-1/4 a bushel. A blast of late-summer heat baking the US Midwest turned attention back to dry conditions that are thought to have stressed the soyabean crop and lowered yields. Light rainfall is expected in portions of the US Midwest corn and soyabean growing region, but a large portion of the soya area will remain dry, according to Commodity Weather Group. The best chance for rain is from the Nebraska/Kansas and Missouri/Iowa border in the western Midwest extending to Illinois, Indiana and Ohio in the east, the firm said.

Expectations for rains pressured soyabean futures on Monday and Tuesday. Traders are paying close attention to US crop weather because large harvests are needed to replenish low inventories. The USDA’s outlook on Thursday is not expected to be the final word on crop supplies. “The market is probably more inclined to wait to see when the combines roll and what the yield monitors tell us,” said Ken Morrison, founder of commodity newsletter Morrison on the Markets.

In its September production forecast on Thursday, the USDA is expected to trim its soyabean yield estimate to 41.2 bushels per acre from 42.6 bushels in August, according to a Reuters poll. December corn rose 3-1/2 cents to $4.72-1/2 a bushel. December wheat gained 1-1/2 cents to $6.48 a bushel. Analysts expect the USDA to cut its estimate for the average corn yield to 153.7 bushels per acre, down from 154.4 bushels forecast in August. Crop forecaster Lanworth on Wednesday edged its US corn harvest forecast up to 13.396 million bushels, based on a yield of 152.2 bushels per acre, from 13.330 million. The firm trimmed its US soya production forecast. Courtesy Reuters

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