Chicago Board of Trade (CBOT) agricultural commodities closed mixed over the trading week ending Sept. 14, with corn futures plunging over 4 percent as U.S. Department of Agriculture (USDA) raised its forecast for U.S. corn production more than analysts expected.
The most active corn contract for December delivery dropped 15.25 cents weekly, or 4.16 percent, to 3.5175 dollars per bushel. December wheat delivery went up 0.25 cents, or 0.05 percent, to 5.115 dollars per bushel. November soybeans fell 13.5 cents, or 1.6 percent, to 8.305 dollars.
CBOT corn futures fell to new seasonal lows following USDA's shocking September crop estimate report. Record yield will be adopted by the trade, but interestingly yield data so far has been much less than either 2016 or 2017.
There's a strong tendency for yields to rise in October following a hike in September, but the market will now pay more attention to harvest reports. Heavy rain will return to the Midwest next week and beyond. A drier pattern will be desired in early October.
Major world corn exporter stocks and use will stay tight until next year's South American harvest. There's great incentive for U.S. exporters and ethanol blenders at current prices.
Analysts suggest this is a place to extend supply coverage, not make new cash sales. Chart healing is needed, but better sales opportunities are ahead.
The U.S. wheat futures rose moderately following a surprising boost in the USDA's Russian production forecast in the September World Agricultural Supply and Demand Estimates (WASDE) report. Record corn yield also weighed on the market as replacing wheat in the U.S. feed ration will be more easily managed.
A Russian wheat harvest of 71 million tonnes is possible, but spring wheat yields are coming in below expectations and analysts still see the final crop total between 66 and 68 million tonnes.
Traders are hearing concern over ongoing rainfall in Siberia and recall planting was delayed into the last half of May.
However, analysts' contacts suggest Russian government intervening to restrict Russian wheat exports at 25 million tonnes. Spring wheat yields and weekly export shipments will be monitored in the weeks ahead, and Aussie and EU prices of wheat are still too expensive to attract world market share.
It was a back-and-forth week of trade in the soybean market. Prices sold off ahead of the September Crop Production and WASDE report but rallied following the report's release. USDA raised their estimate for the soybean yield to a record large 52.8 bushels per acre, while the WASDE report increased year-end stocks to a record large 845 million bushels.
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