US grain and soyabean futures edged higher early on Thursday on expectations the Agriculture Department will trim its domestic harvest estimates in highly anticipated reports due out Friday. The USDA, in the monthly reports, is projected to cut its corn and soyabean production projections due to unfavourable weather, including hot and dry conditions in parts of the Midwest in August. Forecasts for US ending stocks of each crop also are expected to decline.
The size of the crops is of key concern to traders because prices have tumbled over the past year due to massive harvests in 2014. Export demand for crops like soyabeans and wheat also has been weak because of stiff competition for business from other countries. "Traders are eagerly awaiting tomorrow's USDA data dump," said Kevin Van Trump, chief executive of Farm Direction, a farm consultancy in Missouri.
At the Chicago Board of Trade, December corn advanced 1 percent to $3.72-3/4 a bushel by 12:25 pm (1725 GMT). November soyabeans gained 0.3 percent to $8.74-1/2 a bushel, while December wheat rose 1 percent to $4.76-3/4 a bushel. Traders were evening up positions ahead of the USDA reports as early harvest reports have already indicated that corn yields are coming in lower than expected.
The USDA will likely cut its US corn production estimate to 13.599 billion bushels, with an average yield of 167.6 bushels per acre, from its August estimate of 13.686 billion, with an average yield of 168.8 bushels, according to a Reuters poll of analysts. The agency is expected to cut its US soyabean production estimate to 3.869 billion bushels, with an average yield of 46.4 bushels per acre, from its August estimate of 3.916 billion, with an average yield of 46.9 bushels, according to a Reuters poll of analysts.
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