MarketsFarm — The world agricultural supply and demand estimates (WASDE) from the U.S. Department of Agriculture (USDA) had a “benign effect” on the Chicago Board of Trade (CBOT), according to one trader.
That’s mainly because U.S. production estimates for corn, wheat, and soybeans were largely unchanged.
The U.S. soybean production estimate for 2020-21 was unchanged at 4.125 billion bushels, but new-crop carryout was lower by 10 million bushes, at 395 million bushels.
Corn production estimates were unchanged from last month’s report, totalling 16 billion bushels for 2020-21. However, predictions for ending stocks are slightly higher at 3.3 billion bushels due to lower demand for ethanol.
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However, the report pegged global soyoil stocks to total two billion pounds, which has weighed on soyoil values.
“That caught some traders off guard,” said Terry Reilly of Futures International in Chicago, noting nearby soyoil contracts were down by over 0.4 cent at midday Thursday (all figures US$).
Global wheat ending stocks for 2020-21 were also revised upward by about six million tonnes, totalling a record-high 316.1 million.
“Traders weren’t looking for that,” Reilly said, noting Ukraine’s wheat production was revised downward.
At Thursday’s close, the July Chicago soft red wheat contract was down by seven cents at $4.99 per bushel.
Strong export activity from China was a supportive factor for soybeans. On Thursday morning, USDA announced a sale of 720,000 tonnes of soybeans purchased by China.
“That’s keeping things up,” said Reilly. Soybean prices were around $8.66 per bushel in nearby contracts at Thursday’s close.
Favourable growing conditions across most of the U.S. are expected to limit any significant gains in the market going forward.
— Marlo Glass reports for MarketsFarm from Winnipeg.
