Chicago | Reuters — U.S. corn and soybean futures drifted lower on Thursday as generally favourable U.S. Midwest crop weather bolstered expectations for large harvests, analysts said.
“We just don’t have enough demand … to overcome the good growing conditions that are seen across the Midwest,” said Brian Hoops, president of Midwest Market Solutions.
So far, the U.S. seeding pace has been faster than normal, with 67 per cent of corn and 38 per cent of soybeans planted as of Sunday.
“By Monday, three-fourths of the nation’s corn crop is going to be in the ground and half the soybean crop. We are going to have pretty quick emergence, with warmer temperatures and some moisture,” Hoops said.
The U.S. Department of Agriculture (USDA) this week projected that U.S. farmers would grow a record-large corn crop this year approaching 16 billion bushels, potentially building domestic stockpiles of the feed grain to their highest levels in 33 years.
Some analysts question whether farmers will plant the full 97 million acres of corn that USDA forecast, given a steep slide in cash and futures prices since March. Private analytics firm IEG Vantage on Thursday pegged U.S. corn seedings at 94.2 million acres, according to an IEG client note seen by Reuters.
IEG put U.S. 2020 soybean plantings at 85.9 million acres, the document showed, above the USDA forecast of 83.5 million.
Still, bearish supply outlooks continue to hang over the futures market. Chicago Board of Trade July corn settled down 3/4 cent at $3.17-1/2 a bushel and July soybeans fell 2-1/2 cents to finish at $8.37 a bushel (all figures US$).
Traders were unmoved by USDA’s confirmation that private exporters sold 198,000 tonnes of U.S. soybeans to China along with 20,000 tonnes of soyoil, marking China’s first U.S. purchase of the vegetable oil in nearly two years.
China is set to speed up purchases of U.S. farm goods and will implement the Phase One trade deal with the United States, state-owned agriculture trading house COFCO said.
CBOT wheat futures bucked the weaker trend and closed modestly higher, lifted by short-covering after outlooks for rising world supplies pushed the benchmark CBOT July contract below $5 a bushel.
CBOT July wheat settled up 1/2 cent Thursday at $5.02-1/4 per bushel, rebounding after a dip to $4.96-3/4, the contract’s lowest since March 18.
USDA this week projected that global wheat stocks at the end of the 2020-21 marketing year would rise to a record 310.12 million tonnes, up from 295.12 million at the end of 2019-20.
Beneficial rains this month have put Russia, Ukraine and Kazakhstan, all major Black Sea producers, back on track for large new-crop wheat exports after a dry April, analysts said.
— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Colin Packham in Sydney and Maytaal Angel in London.