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USDA Report Supports Soybean and Corn Futures, Weighs on Wheat

Strategic Insights

— 2 min read

The U.S. Department of Agriculture's February supply and demand report has provided a boost to Chicago Board of Trade soybean and corn futures, with prices expected to open higher. However, the report's neutral stance on wheat has tempered expectations for a rise in prices. The report's reduction of South American soybean and corn production estimates, citing hot and dry weather in Argentina and Brazil, has contributed to the uptick in futures prices. Analysts had anticipated lower estimates, but the USDA's cuts exceeded expectations, leading to a positive reaction from traders.

Key Takeaways:

  • The USDA's February supply and demand report was supportive for Chicago Board of Trade soybean and corn futures, with prices expected to open 10-15 cents per bushel higher for soybeans and 3-5 cents higher for corn.
  • The report was neutral for wheat, with prices expected to open 5-8 cents higher.
  • The USDA cut its estimates for South American soybean and corn production, citing hot and dry weather in Argentina and Brazil.
  • Argentina's soybean production was pegged at 43.8 million metric tons, compared to the USDA's January estimate of 49.5 million.
  • Brazil's soybean crop was estimated at 57 million tons, compared to the USDA's January estimate of 59 million.
  • The USDA estimated 2008-09 U.S. soybean carryout at 210 million bushels, above the average analyst estimate of 203 million.
  • The February estimate for U.S. corn carryout remained unchanged from the agency's January estimate at 1.790 billion bushels.
  • The USDA projected Argentina's corn crop at 13.5 million tons, compared to its January estimate of 16.5 million tons.

Statistics:

  • Soybean futures expected to open 10-15 cents higher per bushel.
  • Corn futures expected to start 3-5 cents higher per bushel.
  • Wheat futures expected to open 5-8 cents higher per bushel.
  • USDA estimated 2008-09 U.S. soybean carryout at 210 million bushels.
  • Average analyst estimate for U.S. soybean carryout was 203 million bushels.
  • February estimate for U.S. corn carryout remained unchanged at 1.790 billion bushels.
  • USDA projected Argentina's soybean production at 43.8 million metric tons.
  • USDA estimated Argentina's wheat crop at 8.4 million tons, down from its January estimate of 9.5 million tons.

Sources:

  • "USDA Report Supportive for Soybean, Corn; Neutral on Wheat," Dow Jones Commodities News via Comtex, February 10, 2009.
  • Tom Polansek, Dow Jones Newswires, 312-341-5780, tom.polansek@dowjones.com.

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