Chicago | Reuters — U.S. corn futures inched higher on Monday on position-squaring ahead of a key monthly U.S. government crop report later this week and worries about forecasts for a freeze looming for the northwestern Corn Belt, traders said.
Soybeans and wheat closed lower after a choppy session.
Chicago Board of Trade December corn settled up 2-1/4 cents at $3.87 per bushel but stayed inside of Friday’s trading range (all figures US$). November soybeans ended down one cent at $9.15-1/4 a bushel, and December wheat fell 1-1/4 cents at $4.89-1/4 a bushel.
Commodity funds hold a net short position in CBOT corn futures, leaving the market vulnerable to bouts of short-covering, especially in advance of the U.S. Department of Agriculture’s Oct. 10 supply/demand report.
Analysts surveyed by Reuters on average expect the government to lower its forecasts of U.S. yield, production and 2019-20 ending stocks for both corn and soybeans.
“All eyes are on the crop report on Thursday, what the yield is, and the demand. It’s just balancing positions ahead of the report,” said Don Roose, president of Iowa-based U.S. Commodities.
Additional support in corn stemmed from forecasts for late-week snowstorms across the Dakotas and western Minnesota followed by a cold spell. Lows in northwest Iowa next weekend could dip to -2 C.
“Temperatures will… be turning much colder later this week, with a significant freeze event expected across the western Corn Belt, ending the growing season in many areas,” space technology company Maxar said in a daily weather note.
In Iowa, the top U.S. corn state, just 52 per cent of the corn was mature as of Sunday, lagging the state’s five-year average of 88 per cent, USDA said in a weekly crop progress report released after the CBOT close.
“It’s a foot-race for crops in those areas” to reach maturity ahead of the freeze, Roose said.
Nationally, the U.S. corn harvest was 15 per cent complete, USDA said, lagging the five-year average of 27 per cent and the average estimate in a Reuters poll, at 19 per cent.
USDA said the U.S. soybean harvest was 14 per cent complete, behind the five-year average of 34 per cent. Analysts on average estimated the soy harvest as 15 per cent complete.
On the global trade front, U.S. and Chinese officials meet in Washington on Thursday and Friday in a fresh effort to solve the trade war that has slashed U.S. exports of soybeans and other farm products to China.
“The U.S./China trade talks are in focus this week. But markets now want concrete indications of progress in the trade war before reacting,” said Matt Ammermann, commodity risk manager with INTL FCStone.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.