SINGAPORE, Aug 13: Chicago soybean futures rose for a second straight session on Tuesday, climbing to the highest since July 25 as the US government’s forecast for a deeper reduction in production and closing stocks underpinned prices.
Corn was little changed, after rising more than 2 percent on Monday as the US Department of Agriculture cut its production estimate instead of increasing it. Wheat added 0.4 percent.
US farmers will reap the biggest corn crop and the third-largest soybean crop ever this fall, government forecasters said on Monday, but the harvests will be smaller than traders expected because of lower yields and ending stocks are projected to be below traders’ estimates.
Analysts said the US Department of Agriculture could revise its estimates higher as it gets closer to the harvest.
‘The USDA estimate is supportive in the near-term but as we move towards the harvest, we will see that estimate come under significant pressure,’ said Ole Houe, an analyst at Sydney-based brokerage IKON Commodities.
‘We will start seeing reports soon about US harvest being much better than what has been reported.’
Chicago Board of Trade November soybeans gained 0.7 percent to $12.33-1/2 a bushel by 0323 GMT, while December corn added 0.2 percent to $4.64-3/4 a bushel.
December wheat rose 0.4 percent to $6.51-3/4 a bushel.
With the harvest a few weeks away, the USDA forecast a corn crop of 13.763 billion bushels, up 28 percent from drought-hit 2012 but 2 percent smaller than traders expected.
Soybeans would total 3.255 billion bushels, up 8 percent from last year but more than 2 percent below trade expectations.
US stocks at the end of the 2013/14 marketing year next Aug. 31 were forecast at 1.837 billion bushels of corn and 220 million bushels for soybeans, both the largest since 2006. Analysts polled ahead of the report had expected corn stocks of 1.971 billion bushels and soybeans of 263 million bushels.
The latest weather forecasts for the US crop belt suggest drier conditions over the coming weeks which could begin trimming yield potential.
Corn has already pollinated and needs moisture to fill grain kernels. August weather is more critical for soybean plants, which will be adding new pods and filling them with beans.
Soybeans also drew support from demand. The USDA on Monday confirmed private sales of 853,000 tonnes of US soybeans to China and unknown destinations for delivery in the 2013/14 (Sept/Aug) marketing year.
Commodity funds bought a net 14,000 corn contracts and 11,000 soybean contracts on Monday, trade sources estimated.
For wheat, the USDA said global production was forecast at a record high of 705.4 million tonnes.
It raised its estimate of the crop in Kazakhstan by 2.5 million tonnes, citing ‘abundant spring and summer rainfall’ that boosted the yield outlook in Kazakhstan and adjoining spring wheat areas of Russia. USDA also raised Ukraine’s wheat forecast by 2 million tonnes.
(AGENCIES)
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