by Agrimoney.com
Corn and soybean prices recovered from a late-morning sell-off in Chicago as weather fears turned up a notch, offsetting relief for consumers at raised estimates for US inventories.
Soybean futures initially dropped some 1% after the US Department of Agriculture, in its much-watched Wasde crop report, raised its estimate for domestic soybean stocks at the close of 2013-14 by 30m bushels (82,000 tonnes) to 295m bushels (8.04m tonnes).
The upgrade reflected a higher figure for sowings, as revealed by an official plantings report two weeks, with the estimate for yield left unchanged at 44.5 bushels per acre.
Consumption downgrade
Chicago corn futures fell 2% after the Wasde surprised investors by making a small rise to US stocks of the grain at the close of 2013-14 too, rather than the downgrade of some 50m bushels that analysts had expected.
The figure reflected the higher-than-expected figure for US corn sowings, of 94.1m acres, unveiled by the June plantings report and an unchanged yield figure, although the USDA did make a larger allowance for abandonment, reflecting greater sowings in higher-risk states such as Texas.
Furthermore, the USDA trimmed its forecast for US corn usage of 2013 crops, both in exports, as "tight supplies of corn in early September are expected to limit early-season shipments", and in livestock feed.
Livestock consumption of 2013 crop will recover strongly, but by 50m bushels fewer than previously expected thanks to the late harvest delaying the release of supplies.
'Wait-and-see attitude'
The revisions were deemed "very neutral" by Steve Kahler, chief operating officer at Teucrium Trading who, while noting the corn and stocks stocks upgrades, flagged that investors were taking the data as possessing some element for leeway.
"I think the USDA is taking wait-and-see attitude for now over any change to its yield forecasts, given a corn crop that is developing two weeks later than normal, maybe three week, thanks to the late planting season," he told Agrimoney.com.
However, prices were helped to a late revival by a turn less clement in the US weather outlook.
"The midday GFS model turned drier from the early morning run, which had turned wetter and cooler," Darrell Holaday at Country Futures said.
November soybeans stood 0.3% up at $12.88 ¾ a bushel in late deals in Chicago, with December corn adding 0.5% to $5.24 a bushel.
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