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Commodity futures

USDA Crop Data Supports Soy Complex, Neutral to Slightly Bullish for Corn and Wheat Futures

Strategic Insights

— 2 min read

Traders on the Chicago Board of Trade agricultural floor found the monthly U.S. Department of Agriculture crop data to be supportive for the CBOT soy complex and neutral to slightly bullish for corn and wheat futures. The data was released on Friday, and it showed that soybean futures were expected to open up 3-5 cents, corn futures were steady to up 1 cent, and wheat futures were steady up 3 cents. The market was influenced by forecasts for harvest-delaying rains in top wheat producer Kansas and the landfall of Tropical Storm Arlene, which could spread Asian soybean rust into major soybean production areas.

Key Takeaways:

  • The USDA lowered its 2004-05 soybean ending stocks estimate by 35 million bushels to 320 million bushels, below analysts' expectations of 334 million.
  • The USDA also lowered its 2005-06 soybean ending stocks estimate by 35 million bushels to 255 million bushels, also below analysts' estimates of 281 million.
  • The USDA raised its forecast for 2005-06 U.S. soybean exports to a record high 1.135 billion bushels.
  • Traders revised their soybean opening calls to 10 cents per bushel higher.
  • The USDA slightly lowered its old- and new-crop world ending stocks for corn, to 127.99 million tons and 121 million tons from 128.70 million and 122.1 million, respectively.
  • The USDA left unchanged its U.S. new-crop ending corn stocks estimate at 2.540 billion bushels, above analysts' estimates for 2.458 billion.
  • The USDA lowered its forecast for 2005 U.S. winter wheat production to 1.55 billion bushels, about 3% less than the 1.59-billion-bushel prediction made in May.
  • The USDA cut its 2005 hard red winter wheat production estimate by 5% to 960 million bushels.

Statistics:

  • The USDA lowered its 2004-05 soybean ending stocks estimate by 35 million bushels to 320 million bushels.
  • The USDA raised its forecast for 2005-06 U.S. soybean exports to a record high 1.135 billion bushels.
  • The USDA slightly lowered its old- and new-crop world ending stocks for corn, to 127.99 million tons and 121 million tons from 128.70 million and 122.1 million, respectively.
  • The USDA lowered its forecast for 2005 U.S. winter wheat production to 1.55 billion bushels.
  • Tropical Storm Arlene was expected to pack stiff northwesterly winds of up to 60 miles an hour.

Sources:

  • Dow Jones Commodities News via Comtex
  • USDA crop data
  • Rich Balvanz of Ag Management Services
  • Susan Schwendener; Dow Jones Newswires; 312-341-5780; sue.schwendener@dowjones.com

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