On Friday, corn futures for March delivery increased by 3.3%, reaching $4.71 1/4 per bushel on the Chicago Board of Trade. This surge followed the USDA's announcement of a larger-than-anticipated reduction in U.S. corn production and ending stocks, as assessed by analysts.
Soybean futures for March increased by 2.8%, reaching $10.27 per bushel.
Wheat prices for March delivery decreased by 0.8%, settling at $5.30 and a quarter per bushel.
KEY POINTS
Late Season Changes: Following the release of the USDA's WASDE report this month, CBOT grain prices experienced a significant increase. The USDA's demand forecasts indicated an upward trend, while supply estimates were lowered due to weather challenges affecting the final phases of the U.S. harvest. The declines were more substantial than analysts from The Wall Street Journal had anticipated, providing the momentum for futures to rise. "The USDA delivered yet another surprising report to the market," remarked Doug Bergman of RCM Alternatives in a statement.
Set Aside: With the WASDE report on the horizon, traders largely overlooked the weekly export sales data released by the USDA today. The figures fell short of the predictions made by analysts from The Wall Street Journal earlier this week. For the week ending January 2, corn export sales reached 445,000 metric tons for the 2024/25 marketing year, which is below the analysts' lower estimate. Soybean export sales for the 2024/25 and 2025/26 seasons amounted to 289,100 tons, while wheat sales were recorded at 111,300 tons, both figures also disappointing compared to estimates.
PERSPECTIVE
Ongoing Volatility: Grain futures have faced downward pressure due to the prevailing sentiment that global supplies are abundant. However, the latest WASDE report has prompted traders to reevaluate their positions, particularly concerning corn. "With the U.S. corn stocks/use ratio nearing the critical 10% mark, I anticipate that market fluctuations will persist throughout the spring and into early summer," remarked Jake Hanley from Teucrium Trading.
Conversely: Although the USDA has lowered its forecasts for corn and soybean yields, it has increased its projection for U.S. cotton production for the 2024/25 season to 14.41 million bales, up from the December estimate of 14.26 million bales. The agency also adjusted its national all-cotton yield estimate upward by 44 pounds, bringing it to 836 pounds per harvested acre, attributing this change to a larger crop size and a decrease in harvested area. Additionally, the forecast for U.S. ending stocks has been raised to 4.8 million bales, compared to the previous estimate of 4.4 million bales. Cotton has been experiencing a decline in acreage in recent years as southern U.S. farmers increasingly choose to plant more lucrative soybean crops.
FORWARD
--At 11 a.m. ET on Monday, the USDA is set to publish its weekly report on Grain Export Inspections.
--The EIA is set to publish its weekly report on ethanol production and inventory at 10:30 a.m. ET this Wednesday.
--The USDA is set to publish its weekly export sales report at 8:30 a.m. ET on Thursday.
Write to Kirk Maltais at [email protected]
(END) Dow Jones News Service
January 10, 2025, at 3:29 PM ET (8:29 PM GMT)
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