CANBERRA: Chicago corn and soybean futures rose to multi-month highs on Monday after the US Department of Agriculture (USDA) cut its estimates for US production and end-of-season stocks, suggesting supply will be tighter than previously thought.
Wheat futures also rose, but prices remain near four-year lows, amid weak demand and a strong US dollar that has made US crops less competitive on the global market.
By 0334 GMT, the most active corn contract on the Chicago Board of Trade (CBOT) had risen 0.7% to $4.73-3/4 a bushel and CBOT soybeans had gained 0.8% to $10.33-3/4 a bushel.
Wheat was up 0.8% at $5.34-3/4 a bushel. Corn prices are at their highest since May and soybeans are their highest since November.
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Both are up more than 3% since the USDA released its estimate on Friday.
The USDA cut its 2024 corn production estimates to 14.867 billion bushels from 15.143 billion, and its soybean output forecast to 4.366 billion bushels from 4.461 billion, with both downgrades exceeding analysts’ expectations.
The USDA also reduced its forecasts for 2024-25 season US corn ending stocks to 1.54 billion bushels from 1.738 billion and for US soy ending stocks to 380 million bushels from 470 million.
Speculators are bullish on CBOT corn but cautious about soybean prices ahead of upcoming South American corn and soy harvests.
Consultants Safras & Mercado on Friday raised their forecast from Brazil’s 2024/25 soybean production to 173.71 million tons and Patria AgroNegocios trimmed their estimate to 167.94 million tons, with both projections implying production will be around 20 million tons more than last year.
In Argentina, however, hot and dry weather has damaged production prospects.
“This issue is a boost for prices but it is likely a supporting role. Other issues, not least the USDA cutting its production and inventory estimates, have been more important,” said independent analyst Tobin Gorey.
“Brazil’s excellent corn crop prospects do continue as an anchor for the market,” he said. “Brazil’s soybean crop prospects are acting as a much heavier anchor for oilseed markets.”
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