MarketsFarm — The U.S. Department of Agriculture’s (USDA) monthly world agricultural supply/demand estimates (WASDE), released Monday, have since played a major role on the Chicago Board of Trade (CBOT), one trader says.
Terry Reilly, grains analyst for Futures International in Chicago, said while corn ending stocks (1.219 billion bushels) and average yield (172.5 bushels per acre) were in line with analysts’ expectations, traders expected more bullish figures — which took the price of December corn to $6.995/bu. on Monday (all figures US$).
“While the numbers came right at analysts’ expectations, we would say the traders were probably a little disappointed,” he said.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
As for soybeans, USDA’s projected carryout of 200 million bushels and average yield of 50.5 bu./ac. were both lower than expected for analysts and traders. CBOT November soybeans closed Monday at $14.8825/bu., 76 cents higher than the previous Friday.
“Analysts were looking for a minor carryout drop from last month. Instead, it was 45 million bushels,” Reilly added. “I think that surprised both analysts and traders to the upside.”
Seasonal harvest pressures are affecting wheat, as well as corn and soybeans. However, recent reports from Statistics Canada (StatCan) had minor, yet competing effects on wheat prices, according to Reilly.
“They came out with a stocks report (on Sept. 7) and that showed a little bit lower stock than expected (3.7 million tonnes) and we knew that number was going to be low, but it still added a little bit of support for wheat,” he said. “Then (the Sept. 14) report said wheat production was going to be strong (34.7 million tonnes), and it was. It came in a fraction lower than analysts’ expectations.”
Reilly added that wheat prices, especially that of Kansas City hard red wheat, may have also received support from a potential rail strike in the U.S. involving Norfolk Southern, Burlington Northern Santa Fe and Union Pacific railways.
However, prices for wheat, corn and soybeans may be affected by USDA’s first export sales report in four weeks on Thursday, according to Reilly. The report had been suspended by USDA due to errors in a newly implemented reporting system.
“(The next) weekly export sales report will not only show this week’s export sales, but also will go back and post the missing data from the previous weeks. So, we’ll see a larger-scale report,” he said.
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
