Chicago | Reuters—Benchmark corn futures Cv1 on the Chicago Board of Trade hit their highest in a year on Monday and soybean futures Sv1 notched a three-month top on follow-through buying after the U.S. Department of Agriculture last week cut its estimates of the size of the U.S. 2024 crops, analysts said.
The cuts signaled tighter inventories of corn and soy ahead of the next U.S. harvest. Wheat futures followed the firm trend.
CBOT March corn CH25 settled up 6 cents at $4.76-1/2 per bushel after reaching $4.77, the highest on a continuous chart of the most-active corn contract Cv1 since late December 2023.
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March soybeans SH25 climbed 27-3/4 cents to end at $10.53 a bushel after reaching $10.53-1/2, the highest level on a continuous soybean chart Sv1 since Oct. 4. CBOT March wheat WH25 finished up 14-1/4 cents at $5.45 a bushel.
Grain futures were jolted higher on Friday after the USDA slashed its estimate of the U.S. 2024 corn crop to 14.867 billion bushels, from 15.143 billion previously, after a dry end to the growing season. Factoring in usage, the government cut its forecast of corn stocks remaining at the end of the 2024-25 marketing year to 1.540 billion bushels, down from 1.738 billion previously and below nearly all analyst expectations.
“The stocks-to-usage ratio says that corn has some potential here,” Tom Fritz, a partner with EFG Group in Chicago, said of CBOT corn futures. “We just have to get through the wave of farmer selling,” Fritz said.
Soybean futures also climbed on bullish data in Friday’s reports, in which the USDA lowered its estimates of U.S. soybean production and ending stocks more than analysts expected.
Commodity funds hold net short positions in CBOT soybean, soymeal and soyoil futures, leaving those markets prone to short-covering rallies.
However, traders are also eyeing large South American soybean crops as the early harvest begins in Brazil, the world’s biggest producer of the oilseed. Farmers across Brazil have cut 0.3 per cent of the soy area, a drop from 2.3 per cent at this time a year ago, agribusiness consultancy AgRural said, citing rain delays.
The USDA on Friday left its estimate of Brazil’s soybean crop unchanged at a record-high 169 million metric tons while consultancy AgResource Co on Monday raised its estimate of the crop to 172.07 million tons, from 170.04 million previously.
“Soybeans (futures) are seeing the strongest gains … not because they have the strongest fundamentals, but because that’s where the big short positions are at risk,” StoneX chief commodities economist Arlan Suderman wrote in a client note.
—Additional reporting by Michael Hogan in Hamburg and Peter Hobson in Canberra
