U.S. grains: Corn hits contract lows

Chicago | Reuters — U.S. corn futures fell to contract lows on Friday after the U.S. Department of Agriculture raised its forecast of U.S. corn ending stocks above a range of trade expectations, reflecting a drop in the government’s corn export forecast.

U.S. soybean futures also declined and wheat recorded a fifth straight weekly decline, despite ending higher on the day.

Chicago Board of Trade May corn futures settled down one cent at $3.64-1/4 per bushel after dipping to a contract low of $3.62-1/4, the lowest price for a most-active contract since Nov. 21 (all figures US$).

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CBOT May soybeans ended down 6-3/4 cents at $8.95-3/4 a bushel while May wheat finished up 1-1/4 cents at $4.39-1/2 a bushel.

Corn futures fell after USDA in a monthly report raised its forecast of U.S. corn stocks remaining at the end of the 2018-19 marketing year to 1.835 billion bushels, topping the highest in a range of trade expectations.

The projected increase reflected a drop in the government’s estimate of U.S. corn exports to 2.375 billion bushels, down 75 million from USDA’s previous monthly report.

However, the market was underpinned by the fact that corn futures have already fallen sharply in the last two weeks.

“The big change in the exports is really disappointing for the corn. But here we are, barely lower, when it could be a dime lower,” said Jack Scoville, analyst with the Price Group.

Soybean futures sagged although USDA’s changes to its U.S. and global ending stocks forecasts were roughly in line with analyst expectations.

USDA pegged Brazil’s soybean crop at 116.5 million tonnes, down from its February estimate of 117 million but above an average of analyst estimates for 115.7 million.

“There were some people thinking they would slash Brazil’s bean production a little more than they did,” said Brian Hoops, president of Midwest Marketing Solutions.

USDA confirmed that China bought 664,000 tonnes of U.S. soybeans, China’s first purchase of U.S. supplies since promising last month to buy 10 million tonnes as part of trade talks. News of the sale had lifted futures on Thursday.

CBOT wheat closed higher in a light bounce after most months hit contract lows.

As with corn, USDA cut its forecast of U.S. 2018-19 wheat exports and raised its forecast of wheat ending stocks to 1.055 billion bushels, from 1.010 billion last month.

“Bigger wheat crops out of Australia and Russia are going to cut into our exports, so USDA was certainly justified,” Hoops said.

For the week, CBOT May wheat fell 17-3/4 cents a bushel or nearly four per cent, its fifth straight drop. May corn fell about two per cent for the week and May soy fell 1.7 per cent, its biggest weekly drop since December.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Colin Packham in Sydney.

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